DuPont Decomposition
Why does JBMA earn its ROE?
Breaking down Return on Equity into profitability, efficiency, and leverage.
ROE = Net Margin × Asset Turnover × Equity Multiplier
14.6% = 3.9% × 0.89 × 4.22
Latest: FY2025
Profitability
Net Margin
3.9%
2.8% →3.9%
How much profit per ₹ of revenue
Efficiency
Asset Turnover
0.89x
0.29x →0.89x
Revenue per ₹ of assets
Leverage
Equity Multiplier
4.22x
3.44x →4.22x
Assets funded by equity vs debt
Trend Analysis
ROE improved by 11.8 pp over 3 years. Driven by net margin improving (2.8% → 3.9%), asset turnover improving (0.29x → 0.89x), leverage rising (3.44x → 4.22x). High financial leverage (equity multiplier > 4x) amplifies returns but also risk.
Historical Decomposition
Last 3 years
| Year | Revenue | PAT | Net Margin | Asset TO | Leverage | ROE |
|---|---|---|---|---|---|---|
| FY2023 | ₹0Cr | ₹0Cr | 2.8% | 0.29 | 3.44 | 2.8% |
| FY2024 | ₹0Cr | ₹0Cr | 4.2% | 0.31 | 4.17 | 5.3% |
| FY2025 | ₹0Cr | ₹0Cr | 3.9% | 0.89 | 4.22 | 14.6% |
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.