DuPont Decomposition
Why does NOVARTIND earn its ROE?
Breaking down Return on Equity into profitability, efficiency, and leverage.
ROE = Net Margin × Asset Turnover × Equity Multiplier
12.8% = 28.3% × 0.38 × 1.21
Latest: FY2025
Profitability
Net Margin
28.3%
-1.0% →28.3%
How much profit per ₹ of revenue
Efficiency
Asset Turnover
0.38x
0.40x →0.38x
Revenue per ₹ of assets
Leverage
Equity Multiplier
1.21x
1.38x →1.21x
Assets funded by equity vs debt
Trend Analysis
ROE improved by 13.4 pp over 4 years. Driven by net margin improving (-1.0% → 28.3%).
Historical Decomposition
Last 4 years
| Year | Revenue | PAT | Net Margin | Asset TO | Leverage | ROE |
|---|---|---|---|---|---|---|
| FY2022 | ₹0Cr | ₹-0Cr | -1.0% | 0.40 | 1.38 | -0.5% |
| FY2023 | ₹0Cr | ₹0Cr | 28.0% | 0.38 | 1.27 | 13.3% |
| FY2024 | ₹0Cr | ₹0Cr | 25.5% | 0.36 | 1.24 | 11.4% |
| FY2025 | ₹0Cr | ₹0Cr | 28.3% | 0.38 | 1.21 | 12.8% |
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.