DuPont Decomposition
Why does NAHARINDUS earn its ROE?
Breaking down Return on Equity into profitability, efficiency, and leverage.
ROE = Net Margin × Asset Turnover × Equity Multiplier
1.9% = 1.2% × 0.85 × 1.81
Latest: FY2025
Profitability
Net Margin
1.2%
3.6% →1.2%
How much profit per ₹ of revenue
Efficiency
Asset Turnover
0.85x
0.29x →0.85x
Revenue per ₹ of assets
Leverage
Equity Multiplier
1.81x
1.42x →1.81x
Assets funded by equity vs debt
Trend Analysis
ROE stable at ~2%. Driven by net margin declining (3.6% → 1.2%), asset turnover improving (0.29x → 0.85x), leverage rising (1.42x → 1.81x).
Historical Decomposition
Last 3 years
| Year | Revenue | PAT | Net Margin | Asset TO | Leverage | ROE |
|---|---|---|---|---|---|---|
| FY2023 | ₹0Cr | ₹0Cr | 3.6% | 0.29 | 1.42 | 1.5% |
| FY2024 | ₹0Cr | ₹0Cr | 5.1% | 0.22 | 1.71 | 2.0% |
| FY2025 | ₹0Cr | ₹0Cr | 1.2% | 0.85 | 1.81 | 1.9% |
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.