DuPont Decomposition
Why does NCC earn its ROE?
Breaking down Return on Equity into profitability, efficiency, and leverage.
ROE = Net Margin × Asset Turnover × Equity Multiplier
10.9% = 3.7% × 1.05 × 2.80
Latest: FY2025
Profitability
Net Margin
3.7%
4.1% →3.7%
How much profit per ₹ of revenue
Efficiency
Asset Turnover
1.05x
0.30x →1.05x
Revenue per ₹ of assets
Leverage
Equity Multiplier
2.80x
2.68x →2.80x
Assets funded by equity vs debt
Trend Analysis
ROE improved by 7.6 pp over 3 years. Driven by asset turnover improving (0.30x → 1.05x).
Historical Decomposition
Last 3 years
| Year | Revenue | PAT | Net Margin | Asset TO | Leverage | ROE |
|---|---|---|---|---|---|---|
| FY2023 | ₹0Cr | ₹0Cr | 4.1% | 0.30 | 2.68 | 3.3% |
| FY2024 | ₹0Cr | ₹0Cr | 3.7% | 0.36 | 2.73 | 3.6% |
| FY2025 | ₹0Cr | ₹0Cr | 3.7% | 1.05 | 2.80 | 10.9% |
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.