DuPont Decomposition
Why does NILAINFRA earn its ROE?
Breaking down Return on Equity into profitability, efficiency, and leverage.
ROE = Net Margin × Asset Turnover × Equity Multiplier
12.4% = 7.2% × 0.36 × 4.77
Latest: FY2026
Profitability
Net Margin
7.2%
-2.4% →7.2%
How much profit per ₹ of revenue
Efficiency
Asset Turnover
0.36x
0.20x →0.36x
Revenue per ₹ of assets
Leverage
Equity Multiplier
4.77x
3.15x →4.77x
Assets funded by equity vs debt
Trend Analysis
ROE improved by 13.9 pp over 5 years. Driven by net margin improving (-2.4% → 7.2%), asset turnover improving (0.20x → 0.36x), leverage rising (3.15x → 4.77x). High financial leverage (equity multiplier > 4x) amplifies returns but also risk.
Historical Decomposition
Last 5 years
| Year | Revenue | PAT | Net Margin | Asset TO | Leverage | ROE |
|---|---|---|---|---|---|---|
| FY2022 | ₹0Cr | ₹-0Cr | -2.4% | 0.20 | 3.15 | -1.5% |
| FY2023 | ₹0Cr | ₹-0Cr | -0.4% | 0.14 | 6.17 | -0.3% |
| FY2024 | ₹0Cr | ₹0Cr | 6.1% | 0.22 | 5.86 | 7.8% |
| FY2025 | ₹0Cr | ₹0Cr | 8.3% | 0.28 | 5.30 | 12.5% |
| FY2026 | ₹0Cr | ₹0Cr | 7.2% | 0.36 | 4.77 | 12.4% |
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.