DuPont Decomposition
Why does NAVA earn its ROE?
Breaking down Return on Equity into profitability, efficiency, and leverage.
ROE = Net Margin × Asset Turnover × Equity Multiplier
11.6% = 27.5% × 0.35 × 1.20
Latest: FY2025
Profitability
Net Margin
27.5%
26.4% →27.5%
How much profit per ₹ of revenue
Efficiency
Asset Turnover
0.35x
0.31x →0.35x
Revenue per ₹ of assets
Leverage
Equity Multiplier
1.20x
1.85x →1.20x
Assets funded by equity vs debt
Trend Analysis
ROE declined by 3.8 pp over 3 years. Driven by net margin improving (26.4% → 27.5%), leverage falling (1.85x → 1.20x).
Historical Decomposition
Last 3 years
| Year | Revenue | PAT | Net Margin | Asset TO | Leverage | ROE |
|---|---|---|---|---|---|---|
| FY2023 | ₹0Cr | ₹0Cr | 26.4% | 0.31 | 1.85 | 15.4% |
| FY2024 | ₹0Cr | ₹0Cr | 24.8% | 0.39 | 1.40 | 13.7% |
| FY2025 | ₹0Cr | ₹0Cr | 27.5% | 0.35 | 1.20 | 11.6% |
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.