EBITDA Margin
EBITDA as a percentage of revenue, measuring operating profitability before depreciation, interest and tax.
Formula
EBITDA Margin = EBITDA / Revenue x 100
Unit
%
In depth
EBITDA margin is the most widely quoted profitability measure in Indian company presentations, precisely because it is the most flattering: it excludes the cost of the assets the business uses. For an asset-light services company the gap to operating margin is small and the measure is informative; for a capital-intensive manufacturer or an infrastructure company the gap is large and the measure overstates economics. Ind AS 116 moved lease rentals out of operating expenses, which lifted EBITDA margins for lease-heavy businesses overnight without any real improvement. Always compute the gap to operating margin rather than accepting EBITDA margin alone.
Worked example
EBITDA ₹220 crore on revenue of ₹1,000 crore gives an EBITDA margin of 22%. After ₹60 crore of depreciation, the operating margin is 16% — the business keeps 16 paise of each rupee, not 22.
Illustrative figures, chosen so the arithmetic is easy to follow. Not a live price and not a valuation of any company.
Educational reference only
This entry explains what “EBITDA Margin” means. It is not investment advice and not a recommendation to buy or sell any security. Any numbers above are illustrative, not live prices, and nothing here predicts price direction or rates a stock. Consider your own circumstances and consult a SEBI-registered investment adviser before acting.