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
14.2% = 3.6% × 0.83 × 4.79
Latest: FY2026
Profitability
Net Margin
3.6%
5.3% →3.6%
How much profit per ₹ of revenue
Efficiency
Asset Turnover
0.83x
0.91x →0.83x
Revenue per ₹ of assets
Leverage
Equity Multiplier
4.79x
3.60x →4.79x
Assets funded by equity vs debt
Trend Analysis
ROE declined by 3.2 pp over 5 years. Driven by net margin declining (5.3% → 3.6%), leverage rising (3.60x → 4.79x). 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 | 5.3% | 0.91 | 3.60 | 17.4% |
| FY2023 | ₹0Cr | ₹0Cr | 3.5% | 1.00 | 3.44 | 12.1% |
| FY2024 | ₹0Cr | ₹0Cr | 3.8% | 0.97 | 4.17 | 15.3% |
| FY2025 | ₹0Cr | ₹0Cr | 3.7% | 0.94 | 4.33 | 14.9% |
| FY2026 | ₹0Cr | ₹0Cr | 3.6% | 0.83 | 4.79 | 14.2% |
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.