DuPont Decomposition
Why does NECLIFE earn its ROE?
Breaking down Return on Equity into profitability, efficiency, and leverage.
ROE = Net Margin × Asset Turnover × Equity Multiplier
-11.9% = -6.8% × 0.82 × 2.14
Latest: FY2025
Profitability
Net Margin
-6.8%
1.5% →-6.8%
How much profit per ₹ of revenue
Efficiency
Asset Turnover
0.82x
0.70x →0.82x
Revenue per ₹ of assets
Leverage
Equity Multiplier
2.14x
2.20x →2.14x
Assets funded by equity vs debt
Trend Analysis
ROE declined by 14.2 pp over 4 years. Driven by net margin declining (1.5% → -6.8%), asset turnover improving (0.70x → 0.82x).
Historical Decomposition
Last 4 years
| Year | Revenue | PAT | Net Margin | Asset TO | Leverage | ROE |
|---|---|---|---|---|---|---|
| FY2022 | ₹0Cr | ₹0Cr | 1.5% | 0.70 | 2.20 | 2.3% |
| FY2023 | ₹0Cr | ₹-0Cr | -1.6% | 0.70 | 2.06 | -2.3% |
| FY2024 | ₹0Cr | ₹0Cr | 0.3% | 0.77 | 2.05 | 0.5% |
| FY2025 | ₹0Cr | ₹-0Cr | -6.8% | 0.82 | 2.14 | -11.9% |
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.