DuPont Decomposition
Why does BLS earn its ROE?
Breaking down Return on Equity into profitability, efficiency, and leverage.
ROE = Net Margin × Asset Turnover × Equity Multiplier
25.2% = 23.2% × 0.78 × 1.39
Latest: FY2025
Profitability
Net Margin
23.2%
13.5% →23.2%
How much profit per ₹ of revenue
Efficiency
Asset Turnover
0.78x
1.60x →0.78x
Revenue per ₹ of assets
Leverage
Equity Multiplier
1.39x
1.18x →1.39x
Assets funded by equity vs debt
Trend Analysis
ROE stable at ~25%. Driven by net margin improving (13.5% → 23.2%), asset turnover declining (1.60x → 0.78x), leverage rising (1.18x → 1.39x).
Historical Decomposition
Last 3 years
| Year | Revenue | PAT | Net Margin | Asset TO | Leverage | ROE |
|---|---|---|---|---|---|---|
| FY2023 | ₹0Cr | ₹0Cr | 13.5% | 1.60 | 1.18 | 25.4% |
| FY2024 | ₹0Cr | ₹0Cr | 31.2% | 0.92 | 1.44 | 41.4% |
| FY2025 | ₹0Cr | ₹0Cr | 23.2% | 0.78 | 1.39 | 25.2% |
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.