DuPont Decomposition
Why does NIRLON earn its ROE?
Breaking down Return on Equity into profitability, efficiency, and leverage.
ROE = Net Margin × Asset Turnover × Equity Multiplier
73.8% = 51.7% × 0.30 × 4.80
Latest: FY2026
Profitability
Net Margin
51.7%
29.2% →51.7%
How much profit per ₹ of revenue
Efficiency
Asset Turnover
0.30x
0.17x →0.30x
Revenue per ₹ of assets
Leverage
Equity Multiplier
4.80x
4.60x →4.80x
Assets funded by equity vs debt
Trend Analysis
ROE improved by 50.6 pp over 5 years. Driven by net margin improving (29.2% → 51.7%), asset turnover improving (0.17x → 0.30x), leverage rising (4.60x → 4.80x). High financial leverage (equity multiplier > 4x) amplifies returns but also risk.
Historical Decomposition
Last 5 years
| Year | Revenue | PAT | Net Margin | Asset TO | Leverage | ROE |
|---|---|---|---|---|---|---|
| FY2022 | ₹0Cr | ₹0Cr | 29.2% | 0.17 | 4.60 | 23.2% |
| FY2023 | ₹0Cr | ₹0Cr | 27.8% | 0.27 | 5.23 | 39.3% |
| FY2024 | ₹0Cr | ₹0Cr | 34.4% | 0.28 | 5.70 | 55.1% |
| FY2025 | ₹0Cr | ₹0Cr | 34.3% | 0.28 | 6.28 | 61.1% |
| FY2026 | ₹0Cr | ₹0Cr | 51.7% | 0.30 | 4.80 | 73.8% |
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.