DuPont Decomposition
Why does BAJFINANCE earn its ROE?
Breaking down Return on Equity into profitability, efficiency, and leverage.
ROE = Net Margin × Asset Turnover × Equity Multiplier
16.7% = 38.3% × 0.09 × 4.91
Latest: FY2026
Profitability
Net Margin
38.3%
22.2% →38.3%
How much profit per ₹ of revenue
Efficiency
Asset Turnover
0.09x
0.15x →0.09x
Revenue per ₹ of assets
Leverage
Equity Multiplier
4.91x
4.86x →4.91x
Assets funded by equity vs debt
Trend Analysis
ROE stable at ~17%. Driven by net margin improving (22.2% → 38.3%). 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 | 22.2% | 0.15 | 4.86 | 16.1% |
| FY2023 | ₹0Cr | ₹0Cr | 42.7% | 0.10 | 5.06 | 21.2% |
| FY2024 | ₹0Cr | ₹0Cr | 42.1% | 0.09 | 4.90 | 18.8% |
| FY2025 | ₹0Cr | ₹0Cr | 40.1% | 0.09 | 4.82 | 17.2% |
| FY2026 | ₹0Cr | ₹0Cr | 38.3% | 0.09 | 4.91 | 16.7% |
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.