DuPont Decomposition
Why does NBCC earn its ROE?
Breaking down Return on Equity into profitability, efficiency, and leverage.
ROE = Net Margin × Asset Turnover × Equity Multiplier
20.3% = 4.7% × 0.85 × 5.11
Latest: FY2025
Profitability
Net Margin
4.7%
4.1% →4.7%
How much profit per ₹ of revenue
Efficiency
Asset Turnover
0.85x
0.22x →0.85x
Revenue per ₹ of assets
Leverage
Equity Multiplier
5.11x
6.62x →5.11x
Assets funded by equity vs debt
Trend Analysis
ROE improved by 14.4 pp over 3 years. Driven by asset turnover improving (0.22x → 0.85x), leverage falling (6.62x → 5.11x). High financial leverage (equity multiplier > 4x) amplifies returns but also risk.
Historical Decomposition
Last 3 years
| Year | Revenue | PAT | Net Margin | Asset TO | Leverage | ROE |
|---|---|---|---|---|---|---|
| FY2023 | ₹0Cr | ₹0Cr | 4.1% | 0.22 | 6.62 | 5.8% |
| FY2024 | ₹0Cr | ₹0Cr | 3.4% | 0.36 | 3.94 | 4.8% |
| FY2025 | ₹0Cr | ₹0Cr | 4.7% | 0.85 | 5.11 | 20.3% |
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.