DuPont Decomposition
Why does NIRAJ earn its ROE?
Breaking down Return on Equity into profitability, efficiency, and leverage.
ROE = Net Margin × Asset Turnover × Equity Multiplier
6.2% = 3.0% × 1.30 × 1.58
Latest: FY2025
Profitability
Net Margin
3.0%
0.7% →3.0%
How much profit per ₹ of revenue
Efficiency
Asset Turnover
1.30x
1.10x →1.30x
Revenue per ₹ of assets
Leverage
Equity Multiplier
1.58x
1.74x →1.58x
Assets funded by equity vs debt
Trend Analysis
ROE improved by 4.8 pp over 4 years. Driven by net margin improving (0.7% → 3.0%), asset turnover improving (1.10x → 1.30x).
Historical Decomposition
Last 4 years
| Year | Revenue | PAT | Net Margin | Asset TO | Leverage | ROE |
|---|---|---|---|---|---|---|
| FY2022 | ₹0Cr | ₹0Cr | 0.7% | 1.10 | 1.74 | 1.4% |
| FY2023 | ₹0Cr | ₹0Cr | 0.7% | 1.88 | 1.78 | 2.5% |
| FY2024 | ₹0Cr | ₹0Cr | 2.1% | 1.80 | 1.68 | 6.4% |
| FY2025 | ₹0Cr | ₹0Cr | 3.0% | 1.30 | 1.58 | 6.2% |
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.