DuPont Decomposition
Why does NACLIND earn its ROE?
Breaking down Return on Equity into profitability, efficiency, and leverage.
ROE = Net Margin × Asset Turnover × Equity Multiplier
0.7% = 0.3% × 1.16 × 2.00
Latest: FY2026
Profitability
Net Margin
0.3%
4.5% →0.3%
How much profit per ₹ of revenue
Efficiency
Asset Turnover
1.16x
1.08x →1.16x
Revenue per ₹ of assets
Leverage
Equity Multiplier
2.00x
3.10x →2.00x
Assets funded by equity vs debt
Trend Analysis
ROE declined by 14.4 pp over 5 years. Driven by net margin declining (4.5% → 0.3%), leverage falling (3.10x → 2.00x).
Historical Decomposition
Last 5 years
| Year | Revenue | PAT | Net Margin | Asset TO | Leverage | ROE |
|---|---|---|---|---|---|---|
| FY2022 | ₹0Cr | ₹0Cr | 4.5% | 1.08 | 3.10 | 15.0% |
| FY2023 | ₹0Cr | ₹0Cr | 4.5% | 1.09 | 3.34 | 16.5% |
| FY2024 | ₹0Cr | ₹-0Cr | -3.4% | 0.97 | 3.56 | -11.5% |
| FY2025 | ₹0Cr | ₹-0Cr | -7.5% | 0.98 | 2.96 | -21.6% |
| FY2026 | ₹0Cr | ₹0Cr | 0.3% | 1.16 | 2.00 | 0.7% |
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.