DuPont Decomposition
Why does BPCL earn its ROE?
Breaking down Return on Equity into profitability, efficiency, and leverage.
ROE = Net Margin × Asset Turnover × Equity Multiplier
16.4% = 3.0% × 2.01 × 2.68
Latest: FY2025
Profitability
Net Margin
3.0%
5.2% →3.0%
How much profit per ₹ of revenue
Efficiency
Asset Turnover
2.01x
0.71x →2.01x
Revenue per ₹ of assets
Leverage
Equity Multiplier
2.68x
3.51x →2.68x
Assets funded by equity vs debt
Trend Analysis
ROE improved by 3.6 pp over 3 years. Driven by net margin declining (5.2% → 3.0%), asset turnover improving (0.71x → 2.01x), leverage falling (3.51x → 2.68x).
Historical Decomposition
Last 3 years
| Year | Revenue | PAT | Net Margin | Asset TO | Leverage | ROE |
|---|---|---|---|---|---|---|
| FY2023 | ₹0Cr | ₹0Cr | 5.2% | 0.71 | 3.51 | 12.8% |
| FY2024 | ₹0Cr | ₹0Cr | 3.6% | 0.65 | 2.68 | 6.3% |
| FY2025 | ₹0Cr | ₹0Cr | 3.0% | 2.01 | 2.68 | 16.4% |
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.