DuPont Decomposition
Why does BHARATGEAR earn its ROE?
Breaking down Return on Equity into profitability, efficiency, and leverage.
ROE = Net Margin × Asset Turnover × Equity Multiplier
2.8% = 0.5% × 1.74 × 3.23
Latest: FY2025
Profitability
Net Margin
0.5%
3.6% →0.5%
How much profit per ₹ of revenue
Efficiency
Asset Turnover
1.74x
1.76x →1.74x
Revenue per ₹ of assets
Leverage
Equity Multiplier
3.23x
3.73x →3.23x
Assets funded by equity vs debt
Trend Analysis
ROE declined by 21.1 pp over 4 years. Driven by net margin declining (3.6% → 0.5%), leverage falling (3.73x → 3.23x).
Historical Decomposition
Last 4 years
| Year | Revenue | PAT | Net Margin | Asset TO | Leverage | ROE |
|---|---|---|---|---|---|---|
| FY2022 | ₹0Cr | ₹0Cr | 3.6% | 1.76 | 3.73 | 23.9% |
| FY2023 | ₹0Cr | ₹0Cr | 1.8% | 1.84 | 3.38 | 11.2% |
| FY2024 | ₹0Cr | ₹-0Cr | -1.5% | 1.67 | 3.49 | -8.8% |
| FY2025 | ₹0Cr | ₹0Cr | 0.5% | 1.74 | 3.23 | 2.8% |
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.