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
21.9% = 23.2% × 0.66 × 1.42
Latest: FY2026
Profitability
Net Margin
23.2%
36.3% →23.2%
How much profit per ₹ of revenue
Efficiency
Asset Turnover
0.66x
0.99x →0.66x
Revenue per ₹ of assets
Leverage
Equity Multiplier
1.42x
1.45x →1.42x
Assets funded by equity vs debt
Trend Analysis
ROE declined by 30.5 pp over 5 years. Driven by net margin declining (36.3% → 23.2%), asset turnover declining (0.99x → 0.66x).
Historical Decomposition
Last 5 years
| Year | Revenue | PAT | Net Margin | Asset TO | Leverage | ROE |
|---|---|---|---|---|---|---|
| FY2022 | ₹0Cr | ₹0Cr | 36.3% | 0.99 | 1.45 | 52.3% |
| FY2023 | ₹0Cr | ₹0Cr | 31.7% | 0.59 | 1.32 | 24.8% |
| FY2024 | ₹0Cr | ₹0Cr | 26.2% | 0.60 | 1.39 | 21.7% |
| FY2025 | ₹0Cr | ₹0Cr | 27.4% | 0.58 | 1.38 | 22.0% |
| FY2026 | ₹0Cr | ₹0Cr | 23.2% | 0.66 | 1.42 | 21.9% |
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.