DuPont Decomposition
Why does NLCINDIA earn its ROE?
Breaking down Return on Equity into profitability, efficiency, and leverage.
ROE = Net Margin × Asset Turnover × Equity Multiplier
11.9% = 17.1% × 0.26 × 2.64
Latest: FY2025
Profitability
Net Margin
17.1%
16.3% →17.1%
How much profit per ₹ of revenue
Efficiency
Asset Turnover
0.26x
0.10x →0.26x
Revenue per ₹ of assets
Leverage
Equity Multiplier
2.64x
3.50x →2.64x
Assets funded by equity vs debt
Trend Analysis
ROE improved by 6.4 pp over 3 years. Driven by asset turnover improving (0.10x → 0.26x), leverage falling (3.50x → 2.64x).
Historical Decomposition
Last 3 years
| Year | Revenue | PAT | Net Margin | Asset TO | Leverage | ROE |
|---|---|---|---|---|---|---|
| FY2023 | ₹0Cr | ₹0Cr | 16.3% | 0.10 | 3.50 | 5.5% |
| FY2024 | ₹0Cr | ₹0Cr | 3.2% | 0.06 | 3.32 | 0.7% |
| FY2025 | ₹0Cr | ₹0Cr | 17.1% | 0.26 | 2.64 | 11.9% |
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.