DuPont Decomposition
Why does BLSE earn its ROE?
Breaking down Return on Equity into profitability, efficiency, and leverage.
ROE = Net Margin × Asset Turnover × Equity Multiplier
10.1% = 10.1% × 0.77 × 1.30
Latest: FY2025
Profitability
Net Margin
10.1%
5.6% →10.1%
How much profit per ₹ of revenue
Efficiency
Asset Turnover
0.77x
1.73x →0.77x
Revenue per ₹ of assets
Leverage
Equity Multiplier
1.30x
3.71x →1.30x
Assets funded by equity vs debt
Trend Analysis
ROE declined by 25.6 pp over 4 years. Driven by net margin improving (5.6% → 10.1%), asset turnover declining (1.73x → 0.77x), leverage falling (3.71x → 1.30x).
Historical Decomposition
Last 4 years
| Year | Revenue | PAT | Net Margin | Asset TO | Leverage | ROE |
|---|---|---|---|---|---|---|
| FY2022 | ₹0Cr | ₹0Cr | 5.6% | 1.73 | 3.71 | 35.7% |
| FY2023 | ₹0Cr | ₹0Cr | 7.8% | 1.35 | 1.61 | 16.9% |
| FY2024 | ₹0Cr | ₹0Cr | 14.8% | 0.14 | 1.18 | 2.5% |
| FY2025 | ₹0Cr | ₹0Cr | 10.1% | 0.77 | 1.30 | 10.1% |
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.