Stocks with a higher operating profit margin often represent well-managed companies with strong operational efficiency and profitability however it is better to keep out IT and Finance stocks as their business model is asset light which makes the valuation of these sectors different.
A high operating profit margin indicates that the company can generate a significant amount of profit from its core operations before accounting for interest and taxes. Investors often seek such stocks as they demonstrate financial strength and the potential for sustainable growth.
In this article, we explore a selection of companies with impressive operating profit margins, signaling their ability to thrive in competitive markets.
1. Eicher Motors
Eicher Motors Ltd. is a renowned Indian manufacturer of premium motorcycles and commercial vehicles. Best known for its iconic Royal Enfield brand, Eicher has established a strong presence in both domestic and international markets.
The company focuses on delivering high-quality, performance-driven products with a blend of modern technology and classic designs. Eicher Motors also operates in the commercial vehicle segment through Eicher Trucks and Buses, contributing significantly to India’s transportation infrastructure.
Share Price: The shares of Eicher Motors closed at Rs. 4,878, 0.8% lower from its previous close of Rs. 4,917.2.
Operating Profit Margin: 26.39%
2. ITC
ITC Limited is a diversified conglomerate with a robust presence in FMCG, hotels, paperboards, packaging, and agri-business. The company is a market leader in categories like packaged foods, personal care, and cigarettes through brands such as Aashirvaad, Sunfeast, and Gold Flake.
ITC’s sustainability-driven initiatives, such as its focus on renewable energy and green building certifications, have strengthened its position as a responsible business entity. With strong financials, ITC continues to be a key player in India’s corporate landscape.
Share Price: The shares of ITC Limited closed at Rs. 477.9, 0.67% lower from its previous close of Rs. 481.1.
Operating Profit Margin: 35.46%
3. Divi’s Laboratories
Divi’s Laboratories Ltd. is a leading Indian pharmaceutical company specializing in active pharmaceutical ingredients (APIs) and generic formulations. Known for its expertise in complex drug synthesis and contract manufacturing, Divi’s Laboratories plays a significant role in the global pharmaceutical industry. With a focus on quality and innovation, the company supplies APIs to major pharmaceutical firms worldwide.
Divi’s Laboratories continues to expand its global footprint, supported by cutting-edge research and development and a commitment to maintaining high manufacturing standards.
Share Price: The shares of Divi’s Laboratories closed at Rs. 5,959.95, 0.1% higher from its previous close of Rs. 5,954.15.
Operating Profit Margin: 28.36%
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4. Adani Ports
Adani Ports and Special Economic Zone (APSEZ) is India’s largest private-sector port operator. The company manages and operates a network of ports and terminals, handling a significant portion of the country’s cargo traffic.
Adani Ports offers integrated logistics solutions, including container handling, bulk cargo, and cargo storage. Its strategic focus on infrastructure development, expanding port capacities, and improving operational efficiency has solidified its position as a critical player in India’s logistics and transportation sector.
Share Price: The shares of Adani Ports closed at Rs. 1,353, 1.23% lower from its previous close of Rs. 1,370.
Operating Profit Margin: 60.35%
5. Indus Towers
Indus Towers Ltd. is a leading tower infrastructure provider in India, offering services related to the installation, operation, and maintenance of telecom towers. As a major player in the telecom industry, Indus Towers supports wireless communication by providing high-quality tower infrastructure to mobile operators.
The company operates a vast network of towers across the country, enabling enhanced connectivity and 4G/5G rollouts. Indus Towers is key to the telecommunications industry’s growth, fostering efficient network expansion and offering cost-effective solutions.
Share Price: The shares of Indus Towers closed at Rs. 339.5, 0.75% lower from its previous close of Rs. 342.05.
Operating Profit Margin: 58.22%
Conclusion
The companies highlighted in this report have demonstrated impressive operating profit margins exceeding 20%. These stocks represent well-managed enterprises with strong operational efficiency, competitive advantages, and robust business models. Their consistent profitability and financial strength make them attractive investment opportunities, as they showcase the ability to thrive in their respective industries.
The high-margin nature of these businesses underscores their potential for sustainable growth and long-term shareholder value creation, making them worthy of further analysis by investors.
Written By: Dipangshu Kundu
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