DuPont Decomposition
Why does BETA earn its ROE?
Breaking down Return on Equity into profitability, efficiency, and leverage.
ROE = Net Margin × Asset Turnover × Equity Multiplier
21.5% = 11.7% × 0.83 × 2.21
Latest: FY2025
Profitability
Net Margin
11.7%
13.5% →11.7%
How much profit per ₹ of revenue
Efficiency
Asset Turnover
0.83x
1.16x →0.83x
Revenue per ₹ of assets
Leverage
Equity Multiplier
2.21x
1.71x →2.21x
Assets funded by equity vs debt
Trend Analysis
ROE declined by 5.4 pp over 4 years. Driven by net margin declining (13.5% → 11.7%), asset turnover declining (1.16x → 0.83x), leverage rising (1.71x → 2.21x).
Historical Decomposition
Last 4 years
| Year | Revenue | PAT | Net Margin | Asset TO | Leverage | ROE |
|---|---|---|---|---|---|---|
| FY2022 | ₹0Cr | ₹0Cr | 13.5% | 1.16 | 1.71 | 26.9% |
| FY2023 | ₹0Cr | ₹0Cr | 13.5% | 1.14 | 1.61 | 25.0% |
| FY2024 | ₹0Cr | ₹0Cr | 12.3% | 1.16 | 1.62 | 23.2% |
| FY2025 | ₹0Cr | ₹0Cr | 11.7% | 0.83 | 2.21 | 21.5% |
How to read DuPont
- • Rising ROE from margin = pricing power, operational improvement (good)
- • Rising ROE from turnover = better asset utilization (good)
- • Rising ROE from leverage = more debt, amplified risk (caution)
- • Falling ROE across all three = structural deterioration (red flag)
DuPont decomposition from audited annual financials. Factual analysis, not investment advice.