DuPont Decomposition
Why does NAGREEKCAP earn its ROE?
Breaking down Return on Equity into profitability, efficiency, and leverage.
ROE = Net Margin × Asset Turnover × Equity Multiplier
87.8% = 33.7% × 0.42 × 6.22
Latest: FY2025
Profitability
Net Margin
33.7%
23.1% →33.7%
How much profit per ₹ of revenue
Efficiency
Asset Turnover
0.42x
0.09x →0.42x
Revenue per ₹ of assets
Leverage
Equity Multiplier
6.22x
6.69x →6.22x
Assets funded by equity vs debt
Trend Analysis
ROE improved by 73.9 pp over 3 years. Driven by net margin improving (23.1% → 33.7%), asset turnover improving (0.09x → 0.42x), leverage falling (6.69x → 6.22x). 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 |
|---|---|---|---|---|---|---|
| FY2022 | ₹0Cr | ₹0Cr | 23.1% | 0.09 | 6.69 | 14.0% |
| FY2024 | ₹0Cr | ₹0Cr | 21.2% | 0.54 | 45.19 | 520.0% |
| FY2025 | ₹0Cr | ₹0Cr | 33.7% | 0.42 | 6.22 | 87.8% |
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.