DuPont Decomposition
Why does NMDC earn its ROE?
Breaking down Return on Equity into profitability, efficiency, and leverage.
ROE = Net Margin × Asset Turnover × Equity Multiplier
22.0% = 27.4% × 0.58 × 1.38
Latest: FY2025
Profitability
Net Margin
27.4%
38.8% →27.4%
How much profit per ₹ of revenue
Efficiency
Asset Turnover
0.58x
0.21x →0.58x
Revenue per ₹ of assets
Leverage
Equity Multiplier
1.38x
1.25x →1.38x
Assets funded by equity vs debt
Trend Analysis
ROE improved by 12.0 pp over 3 years. Driven by net margin declining (38.8% → 27.4%), asset turnover improving (0.21x → 0.58x).
Historical Decomposition
Last 3 years
| Year | Revenue | PAT | Net Margin | Asset TO | Leverage | ROE |
|---|---|---|---|---|---|---|
| FY2023 | ₹0Cr | ₹0Cr | 38.8% | 0.21 | 1.25 | 10.0% |
| FY2024 | ₹0Cr | ₹0Cr | 21.8% | 0.18 | 1.39 | 5.5% |
| FY2025 | ₹0Cr | ₹0Cr | 27.4% | 0.58 | 1.38 | 22.0% |
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.