DuPont Decomposition
Why does NECCLTD earn its ROE?
Breaking down Return on Equity into profitability, efficiency, and leverage.
ROE = Net Margin × Asset Turnover × Equity Multiplier
4.7% = 3.1% × 0.95 × 1.57
Latest: FY2025
Profitability
Net Margin
3.1%
1.7% →3.1%
How much profit per ₹ of revenue
Efficiency
Asset Turnover
0.95x
1.15x →0.95x
Revenue per ₹ of assets
Leverage
Equity Multiplier
1.57x
2.20x →1.57x
Assets funded by equity vs debt
Trend Analysis
ROE stable at ~5%. Driven by net margin improving (1.7% → 3.1%), asset turnover declining (1.15x → 0.95x), leverage falling (2.20x → 1.57x).
Historical Decomposition
Last 4 years
| Year | Revenue | PAT | Net Margin | Asset TO | Leverage | ROE |
|---|---|---|---|---|---|---|
| FY2022 | ₹0Cr | ₹0Cr | 1.7% | 1.15 | 2.20 | 4.3% |
| FY2023 | ₹0Cr | ₹0Cr | 1.9% | 1.26 | 2.32 | 5.5% |
| FY2024 | ₹0Cr | ₹0Cr | 2.4% | 1.06 | 1.63 | 4.1% |
| FY2025 | ₹0Cr | ₹0Cr | 3.1% | 0.95 | 1.57 | 4.7% |
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.