DuPont Decomposition
Why does BIRLAMONEY earn its ROE?
Breaking down Return on Equity into profitability, efficiency, and leverage.
ROE = Net Margin × Asset Turnover × Equity Multiplier
19.5% = 13.7% × 0.12 × 11.54
Latest: FY2026
Profitability
Net Margin
13.7%
13.5% →13.7%
How much profit per ₹ of revenue
Efficiency
Asset Turnover
0.12x
0.18x →0.12x
Revenue per ₹ of assets
Leverage
Equity Multiplier
11.54x
12.49x →11.54x
Assets funded by equity vs debt
Trend Analysis
ROE declined by 11.6 pp over 4 years. Driven by leverage falling (12.49x → 11.54x). High financial leverage (equity multiplier > 4x) amplifies returns but also risk.
Historical Decomposition
Last 4 years
| Year | Revenue | PAT | Net Margin | Asset TO | Leverage | ROE |
|---|---|---|---|---|---|---|
| FY2023 | ₹0Cr | ₹0Cr | 13.5% | 0.18 | 12.49 | 31.1% |
| FY2024 | ₹0Cr | ₹0Cr | 14.7% | 0.17 | 13.01 | 32.5% |
| FY2025 | ₹0Cr | ₹0Cr | 17.8% | 0.17 | 10.46 | 31.4% |
| FY2026 | ₹0Cr | ₹0Cr | 13.7% | 0.12 | 11.54 | 19.5% |
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.