DuPont Decomposition
Why does NPST earn its ROE?
Breaking down Return on Equity into profitability, efficiency, and leverage.
ROE = Net Margin × Asset Turnover × Equity Multiplier
43.3% = 26.1% × 1.19 × 1.40
Latest: FY2025
Profitability
Net Margin
26.1%
7.8% →26.1%
How much profit per ₹ of revenue
Efficiency
Asset Turnover
1.19x
0.63x →1.19x
Revenue per ₹ of assets
Leverage
Equity Multiplier
1.40x
1.37x →1.40x
Assets funded by equity vs debt
Trend Analysis
ROE improved by 36.5 pp over 4 years. Driven by net margin improving (7.8% → 26.1%), asset turnover improving (0.63x → 1.19x).
Historical Decomposition
Last 4 years
| Year | Revenue | PAT | Net Margin | Asset TO | Leverage | ROE |
|---|---|---|---|---|---|---|
| FY2022 | ₹0Cr | ₹0Cr | 7.8% | 0.63 | 1.37 | 6.8% |
| FY2023 | ₹0Cr | ₹0Cr | 16.0% | 0.96 | 1.48 | 22.8% |
| FY2024 | ₹0Cr | ₹0Cr | 21.1% | 1.60 | 1.36 | 46.0% |
| FY2025 | ₹0Cr | ₹0Cr | 26.1% | 1.19 | 1.40 | 43.3% |
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.