DuPont Decomposition
Why does NRL earn its ROE?
Breaking down Return on Equity into profitability, efficiency, and leverage.
ROE = Net Margin × Asset Turnover × Equity Multiplier
11.5% = 9.1% × 1.10 × 1.15
Latest: FY2025
Profitability
Net Margin
9.1%
11.9% →9.1%
How much profit per ₹ of revenue
Efficiency
Asset Turnover
1.10x
2.16x →1.10x
Revenue per ₹ of assets
Leverage
Equity Multiplier
1.15x
1.17x →1.15x
Assets funded by equity vs debt
Trend Analysis
ROE declined by 18.4 pp over 4 years. Driven by net margin declining (11.9% → 9.1%), asset turnover declining (2.16x → 1.10x).
Historical Decomposition
Last 4 years
| Year | Revenue | PAT | Net Margin | Asset TO | Leverage | ROE |
|---|---|---|---|---|---|---|
| FY2022 | ₹0Cr | ₹0Cr | 11.9% | 2.16 | 1.17 | 29.9% |
| FY2023 | ₹0Cr | ₹0Cr | 6.5% | 2.08 | 1.23 | 16.7% |
| FY2024 | ₹0Cr | ₹0Cr | 3.0% | 2.09 | 1.34 | 8.4% |
| FY2025 | ₹0Cr | ₹0Cr | 9.1% | 1.10 | 1.15 | 11.5% |
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.