What does gross margin mean?
Gross margin is the share of sales left after paying for the goods that were sold. Those costs are raw materials, plus finished goods bought to resell.
Everything else, such as salaries, rent and advertising, is paid out of what is left.
How is it worked out?
Add up the cost of materials, the goods bought for resale and the change in stock. Take that from revenue, divide by revenue and multiply by 100.
Why do Indian accounts not print it?
Ind AS 1 makes Indian companies list costs by their nature, such as materials, staff and depreciation.[S1] There is no "cost of sales" line, so there is no ready-made gross profit.
You work it out from the material lines. Asian Paints' FY26 accounts, for example, show "cost of materials consumed" and "purchases of stock-in-trade" separately.[S2]
What do the examples below show?
Cityfort pages do not print gross margin. The examples show two related numbers instead: each company's biggest cost per ₹100 that came in, and its operating margin.
For a jeweller or a paint maker, the biggest cost is usually materials. For a software firm, it is staff, which is why gross margin is rarely used for them.