The formula
Operating Margin = Operating Profit ÷ Revenue, as a percentage. It's close to EBITDA margin but after depreciation, so it reflects the real cost of running the asset base.
How to read it
Operating margin shows how much of each rupee of sales the business keeps before interest and tax. Compare it to the same quarter a year ago rather than the previous quarter, since many Indian businesses are seasonal. Expanding margins are a quality signal.
Compare margins within a sector, never across. A 10% margin can be excellent for a retailer and poor for a software firm.