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
23.9% = 5.6% × 0.79 × 5.39
Latest: FY2026
Profitability
Net Margin
5.6%
3.0% →5.6%
How much profit per ₹ of revenue
Efficiency
Asset Turnover
0.79x
0.56x →0.79x
Revenue per ₹ of assets
Leverage
Equity Multiplier
5.39x
7.60x →5.39x
Assets funded by equity vs debt
Trend Analysis
ROE improved by 11.2 pp over 5 years. Driven by net margin improving (3.0% → 5.6%), asset turnover improving (0.56x → 0.79x), leverage falling (7.60x → 5.39x). High financial leverage (equity multiplier > 4x) amplifies returns but also risk.
Historical Decomposition
Last 5 years
| Year | Revenue | PAT | Net Margin | Asset TO | Leverage | ROE |
|---|---|---|---|---|---|---|
| FY2022 | ₹0Cr | ₹0Cr | 3.0% | 0.56 | 7.60 | 12.7% |
| FY2023 | ₹0Cr | ₹0Cr | 3.0% | 0.68 | 6.62 | 13.7% |
| FY2024 | ₹0Cr | ₹0Cr | 3.9% | 0.81 | 5.71 | 18.0% |
| FY2025 | ₹0Cr | ₹0Cr | 4.5% | 0.88 | 5.50 | 21.8% |
| FY2026 | ₹0Cr | ₹0Cr | 5.6% | 0.79 | 5.39 | 23.9% |
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.