DuPont Decomposition
Why does NILAINFRA earn its ROE?
Breaking down Return on Equity into profitability, efficiency, and leverage.
ROE = Net Margin × Asset Turnover × Equity Multiplier
12.5% = 8.3% × 0.28 × 5.30
Latest: FY2025
Profitability
Net Margin
8.3%
0.0% →8.3%
How much profit per ₹ of revenue
Efficiency
Asset Turnover
0.28x
0.05x →0.28x
Revenue per ₹ of assets
Leverage
Equity Multiplier
5.30x
6.17x →5.30x
Assets funded by equity vs debt
Trend Analysis
ROE improved by 12.5 pp over 3 years. Driven by net margin improving (0.0% → 8.3%), asset turnover improving (0.05x → 0.28x), leverage falling (6.17x → 5.30x). High financial leverage (equity multiplier > 4x) amplifies returns but also risk.
Historical Decomposition
Last 3 years
| Year | Revenue | PAT | Net Margin | Asset TO | Leverage | ROE |
|---|---|---|---|---|---|---|
| FY2023 | ₹0Cr | ₹0Cr | 0.0% | 0.05 | 6.17 | 0.0% |
| FY2024 | ₹0Cr | ₹0Cr | 6.2% | 0.10 | 5.86 | 3.7% |
| FY2025 | ₹0Cr | ₹0Cr | 8.3% | 0.28 | 5.30 | 12.5% |
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.