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
21.8% = 14.4% × 0.75 × 2.00
Latest: FY2025
Profitability
Net Margin
14.4%
13.4% →14.4%
How much profit per ₹ of revenue
Efficiency
Asset Turnover
0.75x
1.09x →0.75x
Revenue per ₹ of assets
Leverage
Equity Multiplier
2.00x
1.95x →2.00x
Assets funded by equity vs debt
Trend Analysis
ROE declined by 6.7 pp over 3 years. Driven by asset turnover declining (1.09x → 0.75x).
Historical Decomposition
Last 3 years
| Year | Revenue | PAT | Net Margin | Asset TO | Leverage | ROE |
|---|---|---|---|---|---|---|
| FY2023 | ₹0Cr | ₹0Cr | 13.4% | 1.09 | 1.95 | 28.5% |
| FY2024 | ₹0Cr | ₹0Cr | 15.7% | 0.89 | 1.95 | 27.4% |
| FY2025 | ₹0Cr | ₹0Cr | 14.4% | 0.75 | 2.00 | 21.8% |
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.