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%
7.9% →1.2%
How much profit per ₹ of revenue
Efficiency
Asset Turnover
0.85x
1.08x →0.85x
Revenue per ₹ of assets
Leverage
Equity Multiplier
1.81x
2.04x →1.81x
Assets funded by equity vs debt
Trend Analysis
ROE declined by 15.6 pp over 4 years. Driven by net margin declining (7.9% → 1.2%), asset turnover declining (1.08x → 0.85x), leverage falling (2.04x → 1.81x).
Historical Decomposition
Last 4 years
| Year | Revenue | PAT | Net Margin | Asset TO | Leverage | ROE |
|---|---|---|---|---|---|---|
| FY2022 | ₹0Cr | ₹0Cr | 7.9% | 1.08 | 2.04 | 17.5% |
| FY2023 | ₹0Cr | ₹0Cr | 4.5% | 1.30 | 1.42 | 8.2% |
| FY2024 | ₹0Cr | ₹0Cr | 0.7% | 0.88 | 1.71 | 1.0% |
| 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.