DuPont Decomposition
Why does NRAIL earn its ROE?
Breaking down Return on Equity into profitability, efficiency, and leverage.
ROE = Net Margin × Asset Turnover × Equity Multiplier
5.4% = 2.0% × 1.06 × 2.49
Latest: FY2026
Profitability
Net Margin
2.0%
3.8% →2.0%
How much profit per ₹ of revenue
Efficiency
Asset Turnover
1.06x
1.60x →1.06x
Revenue per ₹ of assets
Leverage
Equity Multiplier
2.49x
1.87x →2.49x
Assets funded by equity vs debt
Trend Analysis
ROE declined by 6.0 pp over 5 years. Driven by net margin declining (3.8% → 2.0%), asset turnover declining (1.60x → 1.06x), leverage rising (1.87x → 2.49x).
Historical Decomposition
Last 5 years
| Year | Revenue | PAT | Net Margin | Asset TO | Leverage | ROE |
|---|---|---|---|---|---|---|
| FY2022 | ₹0Cr | ₹0Cr | 3.8% | 1.60 | 1.87 | 11.4% |
| FY2023 | ₹0Cr | ₹0Cr | 5.7% | 1.67 | 1.64 | 15.6% |
| FY2024 | ₹0Cr | ₹0Cr | 9.8% | 0.82 | 2.06 | 16.5% |
| FY2025 | ₹0Cr | ₹0Cr | 1.1% | 0.94 | 2.28 | 2.3% |
| FY2026 | ₹0Cr | ₹0Cr | 2.0% | 1.06 | 2.49 | 5.4% |
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.