DuPont Decomposition
Why does NATCOPHARM earn its ROE?
Breaking down Return on Equity into profitability, efficiency, and leverage.
ROE = Net Margin × Asset Turnover × Equity Multiplier
24.8% = 42.7% × 0.51 × 1.13
Latest: FY2025
Profitability
Net Margin
42.7%
30.7% →42.7%
How much profit per ₹ of revenue
Efficiency
Asset Turnover
0.51x
0.16x →0.51x
Revenue per ₹ of assets
Leverage
Equity Multiplier
1.13x
1.16x →1.13x
Assets funded by equity vs debt
Trend Analysis
ROE improved by 19.1 pp over 3 years. Driven by net margin improving (30.7% → 42.7%), asset turnover improving (0.16x → 0.51x).
Historical Decomposition
Last 3 years
| Year | Revenue | PAT | Net Margin | Asset TO | Leverage | ROE |
|---|---|---|---|---|---|---|
| FY2023 | ₹0Cr | ₹0Cr | 30.7% | 0.16 | 1.16 | 5.7% |
| FY2024 | ₹0Cr | ₹0Cr | 36.2% | 0.15 | 1.17 | 6.2% |
| FY2025 | ₹0Cr | ₹0Cr | 42.7% | 0.51 | 1.13 | 24.8% |
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.