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
5.1% = 1.1% × 2.78 × 1.58
Latest: FY2026
Profitability
Net Margin
1.1%
3.2% →1.1%
How much profit per ₹ of revenue
Efficiency
Asset Turnover
2.78x
1.47x →2.78x
Revenue per ₹ of assets
Leverage
Equity Multiplier
1.58x
2.68x →1.58x
Assets funded by equity vs debt
Trend Analysis
ROE declined by 7.5 pp over 5 years. Driven by net margin declining (3.2% → 1.1%), asset turnover improving (1.47x → 2.78x), leverage falling (2.68x → 1.58x).
Historical Decomposition
Last 5 years
| Year | Revenue | PAT | Net Margin | Asset TO | Leverage | ROE |
|---|---|---|---|---|---|---|
| FY2022 | ₹0Cr | ₹0Cr | 3.2% | 1.47 | 2.68 | 12.6% |
| FY2023 | ₹0Cr | ₹0Cr | 0.0% | 1.57 | 2.35 | 0.1% |
| FY2024 | ₹0Cr | ₹0Cr | 2.3% | 1.66 | 2.02 | 7.7% |
| FY2025 | ₹0Cr | ₹0Cr | 0.9% | 2.78 | 2.06 | 5.4% |
| FY2026 | ₹0Cr | ₹0Cr | 1.1% | 2.78 | 1.58 | 5.1% |
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.