What does operating margin mean?
Operating margin is the share of sales left after the costs of running the business. Those costs are materials, staff and other running costs.
It is counted before interest on loans, tax, and depreciation (the wear and tear of machines and buildings). That is why it is also called the EBITDA margin.
How is it worked out?
Take EBITDA (profit before interest, tax, depreciation and amortisation). Divide it by revenue from operations. Multiply by 100.
Why do margins differ so much between companies?
Different businesses carry different costs. A jeweller passes most of its sales on as the cost of gold. A software firm spends most of its sales on staff.
So the number explains how a business works. It is not a score, and comparing it across industries says little on its own.
How is it different from net profit margin?
Net profit margin is worked out after every cost, including interest, depreciation and tax. The gap between the two margins shows how much those three take.
Where do you see it on Cityfort?
Cityfort works it out the same way for every non-bank company: EBITDA divided by revenue from operations. Each non-bank stock page shows both margins in "The numbers", in the table under "Profit kept per ₹100 of revenue".