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 decisions, and capital expenditure timing.
A high EBITDA margin indicates that a company manages its expenses efficiently, is well-positioned to weather economic downturns, is appealing 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 40 percent.
IndusInd Bank Ltd.
IndusInd Bank Limited was established in 1994 as a commercial bank under the Banking Regulation Act of 1949. The bank is publicly traded and provides corporate and retail clients with a wide range of banking products and financial services, as well as treasury services. In India, the bank operates International Financial Service Centres.
On Wednesday, the share price of the company opened around 0.7 percent down Rs 1,517 from its previous close of Rs 1,506.60. The share price increased by 15 percent in six months and 22.5 percent in a year to date.
The company’s EBITDA margin is 39.65 percent, it has a net profit margin of 20.4 percent, CASA ratio of 40 and it has a low price-to-earnings ratio of 14 when compared to its peers.
Looking at the company’s financial statements net revenues rose 26 percent from Rs 10,719 crores in Q2FY23 to Rs 13,529 crores in Q2FY24, Furthermore, net profit increased 22 percent from Rs 1,805 crores to a net profit of Rs 2,202 crores during the same period.
Karur Vysya Bank Ltd.
Karur Vysya Bank offers a variety of banking and financial services, including commercial banking and treasury operations.
On Wednesday, the share price of the company closed around 0.1 percent up Rs 155.5 from its previous close of Rs 155.2. The share price increased by 43 percent in six months and 53 percent in a year.
The company’s EBITDA margin is 38 percent, it has a net profit margin of 17 percent, a CASA ratio of 33.2 and it has a low price-to-earnings ratio of 9 when compared to its peers.
Looking at the company’s financial statements net revenues rose 28.2 percent from Rs 1,821 crores in Q2FY23 to Rs 2,335 crores in Q2FY24, Furthermore, net profit increased 51 percent from Rs 250 crore to a net profit of Rs 378 crores during the same period.
Ujjivan Small Finance Bank Ltd.
Ujjivan Small Finance Bank Limited is an Indian bank that serves financially unserved and underserved segments and is committed to increasing financial inclusion in the country. It was founded in 2005 as Ujjivan Financial Services Limited, a Non-Banking Financial Company, to provide financial services to the “economically active poor” who were underserved by financial institutions.
On Tuesday, the share price of the company closed around 0.61 percent up Rs 56.60 from its previous close of Rs 56.95. The share price increased by 55 percent in six months and 90 percent in a year to date.
The company’s EBITDA margin is 35.6 percent, it has a net profit margin of 26.4 percent, a CASA ratio of 26.4, and it has a low price-to-earnings ratio of 9 when compared to its peers.
Looking at the company’s financial statements net revenues rose 40 percent from Rs 993 crore in Q2FY23 to Rs 1,391 crore in Q2FY24, Furthermore, net profit increased 11 percent from a net loss of Rs 294 crore to a net profit of Rs 327 crore during the same period.
Written by Sriram KV
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