DuPont Decomposition
Why does NDL earn its ROE?
Breaking down Return on Equity into profitability, efficiency, and leverage.
ROE = Net Margin × Asset Turnover × Equity Multiplier
5.4% = 1.0% × 2.74 × 2.06
Latest: FY2025
Profitability
Net Margin
1.0%
0.7% →1.0%
How much profit per ₹ of revenue
Efficiency
Asset Turnover
2.74x
0.36x →2.74x
Revenue per ₹ of assets
Leverage
Equity Multiplier
2.06x
2.35x →2.06x
Assets funded by equity vs debt
Trend Analysis
ROE improved by 4.8 pp over 3 years. Driven by asset turnover improving (0.36x → 2.74x), leverage falling (2.35x → 2.06x).
Historical Decomposition
Last 3 years
| Year | Revenue | PAT | Net Margin | Asset TO | Leverage | ROE |
|---|---|---|---|---|---|---|
| FY2023 | ₹0Cr | ₹0Cr | 0.7% | 0.36 | 2.35 | 0.6% |
| FY2024 | ₹0Cr | ₹0Cr | 4.7% | 0.49 | 2.02 | 4.6% |
| FY2025 | ₹0Cr | ₹0Cr | 1.0% | 2.74 | 2.06 | 5.4% |
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.