DuPont Decomposition
Why does BIL earn its ROE?
Breaking down Return on Equity into profitability, efficiency, and leverage.
ROE = Net Margin × Asset Turnover × Equity Multiplier
3.5% = 1.6% × 0.85 × 2.62
Latest: FY2025
Profitability
Net Margin
1.6%
-2.5% →1.6%
How much profit per ₹ of revenue
Efficiency
Asset Turnover
0.85x
0.71x →0.85x
Revenue per ₹ of assets
Leverage
Equity Multiplier
2.62x
2.93x →2.62x
Assets funded by equity vs debt
Trend Analysis
ROE improved by 8.6 pp over 4 years. Driven by net margin improving (-2.5% → 1.6%), asset turnover improving (0.71x → 0.85x), leverage falling (2.93x → 2.62x).
Historical Decomposition
Last 4 years
| Year | Revenue | PAT | Net Margin | Asset TO | Leverage | ROE |
|---|---|---|---|---|---|---|
| FY2022 | ₹0Cr | ₹-0Cr | -2.5% | 0.71 | 2.93 | -5.1% |
| FY2023 | ₹0Cr | ₹0Cr | 7.8% | 0.79 | 2.62 | 16.2% |
| FY2024 | ₹0Cr | ₹0Cr | 0.0% | 0.69 | 2.82 | 0.1% |
| FY2025 | ₹0Cr | ₹0Cr | 1.6% | 0.85 | 2.62 | 3.5% |
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.