DuPont Decomposition
Why does NIRAJISPAT earn its ROE?
Breaking down Return on Equity into profitability, efficiency, and leverage.
ROE = Net Margin × Asset Turnover × Equity Multiplier
6.3% = 24.8% × 0.21 × 1.19
Latest: FY2024
Profitability
Net Margin
24.8%
15.4% →24.8%
How much profit per ₹ of revenue
Efficiency
Asset Turnover
0.21x
0.35x →0.21x
Revenue per ₹ of assets
Leverage
Equity Multiplier
1.19x
1.34x →1.19x
Assets funded by equity vs debt
Trend Analysis
ROE stable at ~6%. Driven by net margin improving (15.4% → 24.8%), asset turnover declining (0.35x → 0.21x).
Historical Decomposition
Last 3 years
| Year | Revenue | PAT | Net Margin | Asset TO | Leverage | ROE |
|---|---|---|---|---|---|---|
| FY2022 | ₹0Cr | ₹0Cr | 15.4% | 0.35 | 1.34 | 7.2% |
| FY2023 | ₹0Cr | ₹0Cr | 29.9% | 0.37 | 1.22 | 13.7% |
| FY2024 | ₹0Cr | ₹0Cr | 24.8% | 0.21 | 1.19 | 6.3% |
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.