DuPont Decomposition
Why does NDGL earn its ROE?
Breaking down Return on Equity into profitability, efficiency, and leverage.
ROE = Net Margin × Asset Turnover × Equity Multiplier
2.5% = 50.9% × 0.04 × 1.34
Latest: FY2025
Profitability
Net Margin
50.9%
1585.1% →50.9%
How much profit per ₹ of revenue
Efficiency
Asset Turnover
0.04x
0.01x →0.04x
Revenue per ₹ of assets
Leverage
Equity Multiplier
1.34x
1.01x →1.34x
Assets funded by equity vs debt
Trend Analysis
ROE declined by 8.9 pp over 4 years. Driven by net margin declining (1585.1% → 50.9%), leverage rising (1.01x → 1.34x).
Historical Decomposition
Last 4 years
| Year | Revenue | PAT | Net Margin | Asset TO | Leverage | ROE |
|---|---|---|---|---|---|---|
| FY2022 | ₹0Cr | ₹0Cr | 1585.1% | 0.01 | 1.01 | 11.4% |
| FY2023 | ₹0Cr | ₹0Cr | 2525.5% | 0.00 | 1.01 | 9.9% |
| FY2024 | ₹0Cr | ₹0Cr | 434.6% | 0.01 | 1.02 | 3.9% |
| FY2025 | ₹0Cr | ₹0Cr | 50.9% | 0.04 | 1.34 | 2.5% |
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.