DuPont Decomposition
Why does BHARTIARTL earn its ROE?
Breaking down Return on Equity into profitability, efficiency, and leverage.
ROE = Net Margin × Asset Turnover × Equity Multiplier
21.9% = 19.4% × 0.34 × 3.35
Latest: FY2025
Profitability
Net Margin
19.4%
6.2% →19.4%
How much profit per ₹ of revenue
Efficiency
Asset Turnover
0.34x
0.07x →0.34x
Revenue per ₹ of assets
Leverage
Equity Multiplier
3.35x
4.25x →3.35x
Assets funded by equity vs debt
Trend Analysis
ROE improved by 20.2 pp over 3 years. Driven by net margin improving (6.2% → 19.4%), asset turnover improving (0.07x → 0.34x), leverage falling (4.25x → 3.35x).
Historical Decomposition
Last 3 years
| Year | Revenue | PAT | Net Margin | Asset TO | Leverage | ROE |
|---|---|---|---|---|---|---|
| FY2023 | ₹0Cr | ₹0Cr | 6.2% | 0.07 | 4.25 | 1.7% |
| FY2024 | ₹0Cr | ₹0Cr | 7.5% | 0.07 | 3.49 | 1.8% |
| FY2025 | ₹0Cr | ₹0Cr | 19.4% | 0.34 | 3.35 | 21.9% |
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.