DuPont Decomposition
Why does NESCO earn its ROE?
Breaking down Return on Equity into profitability, efficiency, and leverage.
ROE = Net Margin × Asset Turnover × Equity Multiplier
14.3% = 51.3% × 0.24 × 1.15
Latest: FY2025
Profitability
Net Margin
51.3%
54.0% →51.3%
How much profit per ₹ of revenue
Efficiency
Asset Turnover
0.24x
0.07x →0.24x
Revenue per ₹ of assets
Leverage
Equity Multiplier
1.15x
1.15x →1.15x
Assets funded by equity vs debt
Trend Analysis
ROE improved by 9.9 pp over 3 years. Driven by net margin declining (54.0% → 51.3%), asset turnover improving (0.07x → 0.24x).
Historical Decomposition
Last 3 years
| Year | Revenue | PAT | Net Margin | Asset TO | Leverage | ROE |
|---|---|---|---|---|---|---|
| FY2023 | ₹0Cr | ₹0Cr | 54.0% | 0.07 | 1.15 | 4.3% |
| FY2024 | ₹0Cr | ₹0Cr | 55.6% | 0.07 | 1.15 | 4.6% |
| FY2025 | ₹0Cr | ₹0Cr | 51.3% | 0.24 | 1.15 | 14.3% |
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.