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
16.9% = 10.8% × 0.78 × 2.03
Latest: FY2026
Profitability
Net Margin
10.8%
13.5% →10.8%
How much profit per ₹ of revenue
Efficiency
Asset Turnover
0.78x
1.16x →0.78x
Revenue per ₹ of assets
Leverage
Equity Multiplier
2.03x
1.71x →2.03x
Assets funded by equity vs debt
Trend Analysis
ROE declined by 9.9 pp over 5 years. Driven by net margin declining (13.5% → 10.8%), asset turnover declining (1.16x → 0.78x), leverage rising (1.71x → 2.03x).
Historical Decomposition
Last 5 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% |
| FY2026 | ₹0Cr | ₹0Cr | 10.8% | 0.78 | 2.03 | 16.9% |
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.