Companies with high margins

Profitability ratios help investors in checking the financial health of the company. With the help of the profitability ratios investors can answer quick questions like - Is the company good at running its business? Is it making money? How profitable is it compared with its competitors?



Top 3 profitability ratios which immediately come in to investors mind are gross margin, operating margin and net margin. While gross margin is the account of per rupee of sales that a company keeps in the form of gross profit, operating margin captures how much a company makes or loses from its primary business per rupee of sales. On the other hand, net margin considers the portion revenue the company keeps when all expenses or other forms of income have been considered.

We at Myiris.com have picked up 6 stocks which are enjoying high margins. The same are as follows:

Deep Industries:
P/E: 8.69 P/B: 4.79 Mkt Cap: Rs 2.27 billion

Deep Industries is a manufacturer of sheet metal components to automobile and is a provider of industrial applications to power and transmission industry. For FY10, the consolidated gross margin of the company was at 62.80% while its operating profit stood at 44.40%. During the same period, it enjoyed a net margin of 26%.

Divis Laboratories:
P/E: 28.95 P/B: 1.8 Mkt Cap: Rs 99.66 billion

Consolidated gross margin of the drug maker for FY10 was at 52.40%, while its operating profit stood at 38%. During the same period, it enjoyed a net margin of 35.90%.

Puravankara Projects:
P/E: 17.27 P/B: 10.14 Mkt Cap: Rs 23.58 billion

Consolidated gross margin of Bangalore based real estate developer for FY10 was at 38.50% while its operating profit stood at 32.70%. During the same period, it enjoyed a net margin of 30.50%.

Garware Offshore Services:
P/E: 7.4 Mkt Cap: Rs 30.30 billion

Garware Offshore Services is engaged in charter, operate, lease and brokerage of vessels. Consolidated gross margin of the company for FY`10 was at 54.60% while its operating profit stood at 31.80%. During the same period, it enjoyed a net margin of 19.40%.

Gujarat Fluorochemicals:
P/E: 6.42 P/B: 2.29 Mkt Cap: Rs 21.46 billion

Gujarat Fluorochemicals is a manufacturer of resins, refrigerant gases and chemicals. Consolidated gross margin of the company for FY10 was at 57.80% while its operating profit stood at 31.10%. During the same period, it enjoyed a net margin of 27.10%.

Infosys Technologies:
P/E: 28.19 P/B: 14.5 Mkt Cap: Rs 1,626.52 billion

Consolidated gross margin of the IT giant, Infosys Technologies for FY10 was at 39.50% while its operating profit stood at 30.60%. During the same period, it enjoyed a net margin of 27.60%.

via IRIS