DuPont Decomposition
Why does BGRENERGY earn its ROE?
Breaking down Return on Equity into profitability, efficiency, and leverage.
ROE = Net Margin × Asset Turnover × Equity Multiplier
-372.2% = -61.4% × 0.16 × 37.96
Latest: FY2023
Profitability
Net Margin
-61.4%
-15.0% →-61.4%
How much profit per ₹ of revenue
Efficiency
Asset Turnover
0.16x
0.23x →0.16x
Revenue per ₹ of assets
Leverage
Equity Multiplier
37.96x
9.29x →37.96x
Assets funded by equity vs debt
Trend Analysis
ROE declined by 340.5 pp over 2 years. Driven by net margin declining (-15.0% → -61.4%), leverage rising (9.29x → 37.96x). High financial leverage (equity multiplier > 4x) amplifies returns but also risk.
Historical Decomposition
Last 2 years
| Year | Revenue | PAT | Net Margin | Asset TO | Leverage | ROE |
|---|---|---|---|---|---|---|
| FY2022 | ₹0Cr | ₹-0Cr | -15.0% | 0.23 | 9.29 | -31.7% |
| FY2023 | ₹0Cr | ₹-0Cr | -61.4% | 0.16 | 37.96 | -372.2% |
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.