DuPont Decomposition
Why does NESTLEIND earn its ROE?
Breaking down Return on Equity into profitability, efficiency, and leverage.
ROE = Net Margin × Asset Turnover × Equity Multiplier
80.0% = 16.0% × 1.65 × 3.04
Latest: FY2025
Profitability
Net Margin
16.0%
14.4% →16.0%
How much profit per ₹ of revenue
Efficiency
Asset Turnover
1.65x
1.78x →1.65x
Revenue per ₹ of assets
Leverage
Equity Multiplier
3.04x
4.23x →3.04x
Assets funded by equity vs debt
Trend Analysis
ROE declined by 28.9 pp over 4 years. Driven by net margin improving (14.4% → 16.0%), asset turnover declining (1.78x → 1.65x), leverage falling (4.23x → 3.04x).
Historical Decomposition
Last 4 years
| Year | Revenue | PAT | Net Margin | Asset TO | Leverage | ROE |
|---|---|---|---|---|---|---|
| FY2022 | ₹0Cr | ₹0Cr | 14.4% | 1.78 | 4.23 | 108.8% |
| FY2023 | ₹0Cr | ₹0Cr | 14.2% | 1.87 | 3.65 | 97.2% |
| FY2024 | ₹0Cr | ₹0Cr | 17.7% | 0.50 | 3.15 | 28.0% |
| FY2025 | ₹0Cr | ₹0Cr | 16.0% | 1.65 | 3.04 | 80.0% |
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.