DuPont Decomposition
Why does NELCAST earn its ROE?
Breaking down Return on Equity into profitability, efficiency, and leverage.
ROE = Net Margin × Asset Turnover × Equity Multiplier
6.7% = 3.0% × 1.07 × 2.10
Latest: FY2025
Profitability
Net Margin
3.0%
2.4% →3.0%
How much profit per ₹ of revenue
Efficiency
Asset Turnover
1.07x
1.23x →1.07x
Revenue per ₹ of assets
Leverage
Equity Multiplier
2.10x
2.20x →2.10x
Assets funded by equity vs debt
Trend Analysis
ROE stable at ~7%. Driven by asset turnover declining (1.23x → 1.07x).
Historical Decomposition
Last 3 years
| Year | Revenue | PAT | Net Margin | Asset TO | Leverage | ROE |
|---|---|---|---|---|---|---|
| FY2023 | ₹0Cr | ₹0Cr | 2.4% | 1.23 | 2.20 | 6.3% |
| FY2024 | ₹0Cr | ₹0Cr | 4.3% | 1.12 | 2.18 | 10.5% |
| FY2025 | ₹0Cr | ₹0Cr | 3.0% | 1.07 | 2.10 | 6.7% |
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.