DuPont Decomposition
Why does NLCINDIA earn its ROE?
Breaking down Return on Equity into profitability, efficiency, and leverage.
ROE = Net Margin × Asset Turnover × Equity Multiplier
16.4% = 20.1% × 0.27 × 3.03
Latest: FY2026
Profitability
Net Margin
20.1%
9.2% →20.1%
How much profit per ₹ of revenue
Efficiency
Asset Turnover
0.27x
0.24x →0.27x
Revenue per ₹ of assets
Leverage
Equity Multiplier
3.03x
3.51x →3.03x
Assets funded by equity vs debt
Trend Analysis
ROE improved by 8.7 pp over 5 years. Driven by net margin improving (9.2% → 20.1%), leverage falling (3.51x → 3.03x).
Historical Decomposition
Last 5 years
| Year | Revenue | PAT | Net Margin | Asset TO | Leverage | ROE |
|---|---|---|---|---|---|---|
| FY2022 | ₹0Cr | ₹0Cr | 9.2% | 0.24 | 3.51 | 7.7% |
| FY2023 | ₹0Cr | ₹0Cr | 8.6% | 0.30 | 3.50 | 9.2% |
| FY2024 | ₹0Cr | ₹0Cr | 14.3% | 0.24 | 3.32 | 11.2% |
| FY2025 | ₹0Cr | ₹0Cr | 17.1% | 0.26 | 3.09 | 14.0% |
| FY2026 | ₹0Cr | ₹0Cr | 20.1% | 0.27 | 3.03 | 16.4% |
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.