DuPont Decomposition
Why does BHARATFORG earn its ROE?
Breaking down Return on Equity into profitability, efficiency, and leverage.
ROE = Net Margin × Asset Turnover × Equity Multiplier
10.2% = 6.5% × 0.72 × 2.18
Latest: FY2025
Profitability
Net Margin
6.5%
3.5% →6.5%
How much profit per ₹ of revenue
Efficiency
Asset Turnover
0.72x
0.20x →0.72x
Revenue per ₹ of assets
Leverage
Equity Multiplier
2.18x
2.74x →2.18x
Assets funded by equity vs debt
Trend Analysis
ROE improved by 8.3 pp over 3 years. Driven by net margin improving (3.5% → 6.5%), asset turnover improving (0.20x → 0.72x), leverage falling (2.74x → 2.18x).
Historical Decomposition
Last 3 years
| Year | Revenue | PAT | Net Margin | Asset TO | Leverage | ROE |
|---|---|---|---|---|---|---|
| FY2023 | ₹0Cr | ₹0Cr | 3.5% | 0.20 | 2.74 | 1.9% |
| FY2024 | ₹0Cr | ₹0Cr | 5.5% | 0.22 | 2.70 | 3.2% |
| FY2025 | ₹0Cr | ₹0Cr | 6.5% | 0.72 | 2.18 | 10.2% |
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.