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
8.6% = 3.2% × 0.80 × 3.30
Latest: FY2026
Profitability
Net Margin
3.2%
4.4% →3.2%
How much profit per ₹ of revenue
Efficiency
Asset Turnover
0.80x
0.77x →0.80x
Revenue per ₹ of assets
Leverage
Equity Multiplier
3.30x
2.58x →3.30x
Assets funded by equity vs debt
Trend Analysis
ROE stable at ~9%. Driven by net margin declining (4.4% → 3.2%), leverage rising (2.58x → 3.30x).
Historical Decomposition
Last 5 years
| Year | Revenue | PAT | Net Margin | Asset TO | Leverage | ROE |
|---|---|---|---|---|---|---|
| FY2022 | ₹0Cr | ₹0Cr | 4.4% | 0.77 | 2.58 | 8.6% |
| FY2023 | ₹0Cr | ₹0Cr | 4.0% | 0.93 | 2.68 | 9.9% |
| FY2024 | ₹0Cr | ₹0Cr | 3.4% | 1.14 | 2.73 | 10.7% |
| FY2025 | ₹0Cr | ₹0Cr | 3.7% | 1.06 | 2.87 | 11.2% |
| FY2026 | ₹0Cr | ₹0Cr | 3.2% | 0.80 | 3.30 | 8.6% |
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.