Operating Profit
Profit from the core business after all operating costs including depreciation, but before interest and tax.
Formula
Operating Profit (EBIT) = Revenue - Operating Expenses - Depreciation and Amortisation
Unit
₹ crore
In depth
Operating profit, also called EBIT, is the fairest single measure of how well the business itself performs, because it excludes the effects of how the company is financed and where it is taxed. It differs from EBITDA by including depreciation, which makes it a stricter and generally more honest measure for asset-heavy businesses. Because it sits before interest, it is the numerator in interest coverage and in return on capital employed, which is why lenders care about it more than about net profit. Indian filings often label a similar line 'EBITDA' or 'operating profit' inconsistently, so check whether depreciation has been deducted before comparing companies.
Worked example
EBITDA ₹220 crore less depreciation ₹60 crore gives operating profit of ₹160 crore. With interest of ₹40 crore, interest coverage is 160 / 40 = 4 times — comfortable, and invisible if only net profit were examined.
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 “Operating Profit” 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.