DuPont Decomposition
Why does NEOGEN earn its ROE?
Breaking down Return on Equity into profitability, efficiency, and leverage.
ROE = Net Margin × Asset Turnover × Equity Multiplier
4.4% = 4.6% × 0.43 × 2.21
Latest: FY2025
Profitability
Net Margin
4.6%
7.3% →4.6%
How much profit per ₹ of revenue
Efficiency
Asset Turnover
0.43x
0.65x →0.43x
Revenue per ₹ of assets
Leverage
Equity Multiplier
2.21x
2.18x →2.21x
Assets funded by equity vs debt
Trend Analysis
ROE declined by 5.9 pp over 3 years. Driven by net margin declining (7.3% → 4.6%), asset turnover declining (0.65x → 0.43x).
Historical Decomposition
Last 3 years
| Year | Revenue | PAT | Net Margin | Asset TO | Leverage | ROE |
|---|---|---|---|---|---|---|
| FY2023 | ₹0Cr | ₹0Cr | 7.3% | 0.65 | 2.18 | 10.4% |
| FY2024 | ₹0Cr | ₹0Cr | 5.2% | 0.47 | 1.92 | 4.7% |
| FY2025 | ₹0Cr | ₹0Cr | 4.6% | 0.43 | 2.21 | 4.4% |
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.