DuPont Decomposition
Why does NARMADA earn its ROE?
Breaking down Return on Equity into profitability, efficiency, and leverage.
ROE = Net Margin × Asset Turnover × Equity Multiplier
7.3% = 6.2% × 0.99 × 1.19
Latest: FY2025
Profitability
Net Margin
6.2%
1.7% →6.2%
How much profit per ₹ of revenue
Efficiency
Asset Turnover
0.99x
1.32x →0.99x
Revenue per ₹ of assets
Leverage
Equity Multiplier
1.19x
1.74x →1.19x
Assets funded by equity vs debt
Trend Analysis
ROE improved by 3.3 pp over 4 years. Driven by net margin improving (1.7% → 6.2%), asset turnover declining (1.32x → 0.99x), leverage falling (1.74x → 1.19x).
Historical Decomposition
Last 4 years
| Year | Revenue | PAT | Net Margin | Asset TO | Leverage | ROE |
|---|---|---|---|---|---|---|
| FY2022 | ₹0Cr | ₹0Cr | 1.7% | 1.32 | 1.74 | 4.0% |
| FY2023 | ₹0Cr | ₹0Cr | 1.3% | 1.83 | 1.72 | 4.1% |
| FY2024 | ₹0Cr | ₹0Cr | 2.0% | 1.80 | 1.65 | 6.0% |
| FY2025 | ₹0Cr | ₹0Cr | 6.2% | 0.99 | 1.19 | 7.3% |
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.