EBITDA margin, or earnings before interest, taxes, depreciation, and amortization, is a measure of a company’s profitability that excludes the effects of financing decisions, accounting choices, and the timing of capital expenditures.
A high EBITDA margin indicates that a company is efficiently managing its expenses, well-positioned to weather economic downturns, attractive to potential acquirers, and has the potential to boost investor confidence and stock price.
Here is a list of three stocks with EBITDA margins of up to 30%.
Technocraft Industries (India)
Technocraft Industries was established in 1992. It operates in five major business sectors: Drum Closures, Scaffolding Systems, Cotton Yarn, Fabric, Garments, and Engineering Services. The company has manufacturing plants in India and China.
On Friday, the share price of the company closed around 1.5 percent up of Rs 2,261.95 from its previous close of Rs 2,228.75. The share price increased by 46 percent in six months and 148 percent in a year to date. For example, if an investor invests Rs 1 lakh a year to date, the current value is Rs 2.48 lakhs.
The company’s EBITDA margin is 20.29 percent, it has a low debt-to-equity ratio of 0.46, and it has a low price-to-earnings ratio of 18 when compared to its peers.
Looking at the company’s financial statements operating revenues rose 9.15 percent from Rs 476.32 crores in Q2FY23 to Rs 519.9 crores in Q2FY24, Furthermore, net profit increased 4.7 percent from a net loss of Rs 62.99 crores to a net profit of Rs 65.97 crores during the same period.
Sarda Energy & Minerals
Sarda Energy & Minerals Limited (SEML), founded in 1973, is the flagship company of the Sarda Group, producing steel, ferroalloys, and power.
On Friday, the share price of the company closed around 1.5 percent up Rs 243.50 from its previous close of Rs 239.60. The share price increased by 106 percent in six months and 118 percent in a year to date. For example, if an investor invests Rs 1 lakh a year to date, the current value is Rs 2.18 lakhs.
The company’s EBITDA margin is 24.28 percent, it has a low debt-to-equity ratio of 0.41, and it has a low price-to-earnings ratio of 15 when compared to its peers.
Looking at the company’s financial statements operating revenues rose 3.6 percent from Rs 966.54 crores in Q2FY23 to Rs 1,001.36 crores in Q2FY24, Furthermore, net profit decreased 18 percent from a net loss of Rs 184 crores to a net loss of Rs 150 crores during the same period.
Mishra Dhatu Nigam Ltd
Mishra Dhatu Nigam Ltd (MIDHANI) is a company that produces superalloys, titanium, special purpose steel, and other specialty metals. It was founded in 1973 as a Government of India Enterprise under the Ministry of Defence in Hyderabad.
On Friday, the share price of the company closed around 1.5 percent up Rs 373 from its previous close of Rs 375.05 The share price increased by 62 percent in six months and 66 percent in a year to date.
The company’s EBITDA margin is 29.67 percent, it has a low debt-to-equity ratio of 0.30, and it has a net profit margin of 19 percent.
Looking at the company’s financial statements operating revenues rose 25.7 percent from Rs 180.95 crores in Q2FY23 to Rs 227.48 crores in Q2FY24, Furthermore, net profit decreased 60 percent from a net loss of Rs 33 crores to a net loss of Rs 13 crores during the same period.
Written by Sriram KV
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