DuPont Decomposition
Why does NHPC earn its ROE?
Breaking down Return on Equity into profitability, efficiency, and leverage.
ROE = Net Margin × Asset Turnover × Equity Multiplier
9.1% = 32.4% × 0.10 × 2.90
Latest: FY2026
Profitability
Net Margin
32.4%
38.9% →32.4%
How much profit per ₹ of revenue
Efficiency
Asset Turnover
0.10x
0.12x →0.10x
Revenue per ₹ of assets
Leverage
Equity Multiplier
2.90x
2.22x →2.90x
Assets funded by equity vs debt
Trend Analysis
ROE stable at ~9%. Driven by net margin declining (38.9% → 32.4%), leverage rising (2.22x → 2.90x).
Historical Decomposition
Last 5 years
| Year | Revenue | PAT | Net Margin | Asset TO | Leverage | ROE |
|---|---|---|---|---|---|---|
| FY2022 | ₹0Cr | ₹0Cr | 38.9% | 0.12 | 2.22 | 10.1% |
| FY2023 | ₹0Cr | ₹0Cr | 37.3% | 0.12 | 2.31 | 10.6% |
| FY2024 | ₹0Cr | ₹0Cr | 38.9% | 0.10 | 2.39 | 9.3% |
| FY2025 | ₹0Cr | ₹0Cr | 29.0% | 0.10 | 2.59 | 7.6% |
| FY2026 | ₹0Cr | ₹0Cr | 32.4% | 0.10 | 2.90 | 9.1% |
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.