DuPont Decomposition
Why does NH earn its ROE?
Breaking down Return on Equity into profitability, efficiency, and leverage.
ROE = Net Margin × Asset Turnover × Equity Multiplier
17.8% = 10.2% × 0.63 × 2.75
Latest: FY2026
Profitability
Net Margin
10.2%
9.4% →10.2%
How much profit per ₹ of revenue
Efficiency
Asset Turnover
0.63x
1.16x →0.63x
Revenue per ₹ of assets
Leverage
Equity Multiplier
2.75x
2.10x →2.75x
Assets funded by equity vs debt
Trend Analysis
ROE declined by 5.2 pp over 5 years. Driven by asset turnover declining (1.16x → 0.63x), leverage rising (2.10x → 2.75x).
Historical Decomposition
Last 5 years
| Year | Revenue | PAT | Net Margin | Asset TO | Leverage | ROE |
|---|---|---|---|---|---|---|
| FY2022 | ₹0Cr | ₹0Cr | 9.4% | 1.16 | 2.10 | 23.0% |
| FY2023 | ₹0Cr | ₹0Cr | 13.5% | 1.08 | 1.95 | 28.4% |
| FY2024 | ₹0Cr | ₹0Cr | 16.2% | 0.87 | 1.95 | 27.4% |
| FY2025 | ₹0Cr | ₹0Cr | 14.4% | 0.75 | 2.00 | 21.8% |
| FY2026 | ₹0Cr | ₹0Cr | 10.2% | 0.63 | 2.75 | 17.8% |
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.