DuPont Decomposition
Why does BVCL earn its ROE?
Breaking down Return on Equity into profitability, efficiency, and leverage.
ROE = Net Margin × Asset Turnover × Equity Multiplier
4.1% = 2.5% × 0.94 × 1.75
Latest: FY2025
Profitability
Net Margin
2.5%
2.9% →2.5%
How much profit per ₹ of revenue
Efficiency
Asset Turnover
0.94x
0.78x →0.94x
Revenue per ₹ of assets
Leverage
Equity Multiplier
1.75x
2.06x →1.75x
Assets funded by equity vs debt
Trend Analysis
ROE stable at ~4%. Driven by asset turnover improving (0.78x → 0.94x), leverage falling (2.06x → 1.75x).
Historical Decomposition
Last 3 years
| Year | Revenue | PAT | Net Margin | Asset TO | Leverage | ROE |
|---|---|---|---|---|---|---|
| FY2023 | ₹0Cr | ₹0Cr | 2.9% | 0.78 | 2.06 | 4.6% |
| FY2024 | ₹0Cr | ₹0Cr | 3.1% | 1.00 | 1.95 | 6.0% |
| FY2025 | ₹0Cr | ₹0Cr | 2.5% | 0.94 | 1.75 | 4.1% |
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.