DuPont Decomposition
Why does BSL earn its ROE?
Breaking down Return on Equity into profitability, efficiency, and leverage.
ROE = Net Margin × Asset Turnover × Equity Multiplier
2.0% = 0.4% × 1.03 × 5.34
Latest: FY2026
Profitability
Net Margin
0.4%
2.6% →0.4%
How much profit per ₹ of revenue
Efficiency
Asset Turnover
1.03x
1.23x →1.03x
Revenue per ₹ of assets
Leverage
Equity Multiplier
5.34x
3.94x →5.34x
Assets funded by equity vs debt
Trend Analysis
ROE declined by 10.9 pp over 5 years. Driven by net margin declining (2.6% → 0.4%), asset turnover declining (1.23x → 1.03x), leverage rising (3.94x → 5.34x). High financial leverage (equity multiplier > 4x) amplifies returns but also risk.
Historical Decomposition
Last 5 years
| Year | Revenue | PAT | Net Margin | Asset TO | Leverage | ROE |
|---|---|---|---|---|---|---|
| FY2022 | ₹0Cr | ₹0Cr | 2.6% | 1.23 | 3.94 | 12.8% |
| FY2023 | ₹0Cr | ₹0Cr | 3.6% | 0.87 | 5.17 | 16.3% |
| FY2024 | ₹0Cr | ₹0Cr | 1.7% | 1.06 | 5.48 | 10.0% |
| FY2025 | ₹0Cr | ₹0Cr | 1.2% | 1.06 | 5.26 | 6.8% |
| FY2026 | ₹0Cr | ₹0Cr | 0.4% | 1.03 | 5.34 | 2.0% |
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.