Fundamental Glossary / Profitability Metrics
Operating Profit Margin (OPM)
Operating profit as a percentage of revenue.
Formula
Operating profit / revenue.
What it means
OPM shows how much of each sales rupee survives operating costs. It falls below the gross margin by the weight of staff, selling, administration, and depreciation.
It is the margin most often compared across competitors because it includes the full cost of running the operation, not just the factory.
How to read it
A rising OPM with flat gross margin means overheads were controlled or spread over more sales. A falling OPM with a stable gross margin means the leak is below the gross-profit line.
What to watch
One-time operating charges crush a single year's OPM. Ask for the margin excluding those charges, and then ask whether "one-time" charges have appeared in most years.
This note explains the term. It is not a research recommendation, a target price, or a comment on any security. Ratios and regulatory thresholds change; use the latest filing or circular for a live figure.