DuPont Decomposition
Why does NIBE earn its ROE?
Breaking down Return on Equity into profitability, efficiency, and leverage.
ROE = Net Margin × Asset Turnover × Equity Multiplier
10.9% = 5.3% × 1.15 × 1.80
Latest: FY2025
Profitability
Net Margin
5.3%
1.0% →5.3%
How much profit per ₹ of revenue
Efficiency
Asset Turnover
1.15x
0.81x →1.15x
Revenue per ₹ of assets
Leverage
Equity Multiplier
1.80x
2.48x →1.80x
Assets funded by equity vs debt
Trend Analysis
ROE improved by 8.9 pp over 4 years. Driven by net margin improving (1.0% → 5.3%), asset turnover improving (0.81x → 1.15x), leverage falling (2.48x → 1.80x).
Historical Decomposition
Last 4 years
| Year | Revenue | PAT | Net Margin | Asset TO | Leverage | ROE |
|---|---|---|---|---|---|---|
| FY2022 | ₹0Cr | ₹0Cr | 1.0% | 0.81 | 2.48 | 2.0% |
| FY2023 | ₹0Cr | ₹0Cr | 1.5% | 0.69 | 2.05 | 2.1% |
| FY2024 | ₹0Cr | ₹0Cr | 6.7% | 0.89 | 1.69 | 10.1% |
| FY2025 | ₹0Cr | ₹0Cr | 5.3% | 1.15 | 1.80 | 10.9% |
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.