DuPont Decomposition
Why does BIRLACABLE earn its ROE?
Breaking down Return on Equity into profitability, efficiency, and leverage.
ROE = Net Margin × Asset Turnover × Equity Multiplier
1.9% = 0.7% × 1.59 × 1.64
Latest: FY2025
Profitability
Net Margin
0.7%
4.2% →0.7%
How much profit per ₹ of revenue
Efficiency
Asset Turnover
1.59x
1.72x →1.59x
Revenue per ₹ of assets
Leverage
Equity Multiplier
1.64x
2.01x →1.64x
Assets funded by equity vs debt
Trend Analysis
ROE declined by 12.4 pp over 3 years. Driven by net margin declining (4.2% → 0.7%), asset turnover declining (1.72x → 1.59x), leverage falling (2.01x → 1.64x).
Historical Decomposition
Last 3 years
| Year | Revenue | PAT | Net Margin | Asset TO | Leverage | ROE |
|---|---|---|---|---|---|---|
| FY2023 | ₹0Cr | ₹0Cr | 4.2% | 1.72 | 2.01 | 14.4% |
| FY2024 | ₹0Cr | ₹0Cr | 3.2% | 1.50 | 1.82 | 8.8% |
| FY2025 | ₹0Cr | ₹0Cr | 0.7% | 1.59 | 1.64 | 1.9% |
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.