DuPont Decomposition
Why does NEWGEN earn its ROE?
Breaking down Return on Equity into profitability, efficiency, and leverage.
ROE = Net Margin × Asset Turnover × Equity Multiplier
20.8% = 21.2% × 0.73 × 1.35
Latest: FY2025
Profitability
Net Margin
21.2%
26.9% →21.2%
How much profit per ₹ of revenue
Efficiency
Asset Turnover
0.73x
0.23x →0.73x
Revenue per ₹ of assets
Leverage
Equity Multiplier
1.35x
1.32x →1.35x
Assets funded by equity vs debt
Trend Analysis
ROE improved by 12.5 pp over 3 years. Driven by net margin declining (26.9% → 21.2%), asset turnover improving (0.23x → 0.73x).
Historical Decomposition
Last 3 years
| Year | Revenue | PAT | Net Margin | Asset TO | Leverage | ROE |
|---|---|---|---|---|---|---|
| FY2023 | ₹0Cr | ₹0Cr | 26.9% | 0.23 | 1.32 | 8.3% |
| FY2024 | ₹0Cr | ₹0Cr | 28.1% | 0.22 | 1.38 | 8.6% |
| FY2025 | ₹0Cr | ₹0Cr | 21.2% | 0.73 | 1.35 | 20.8% |
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.