Net Profit Margin Calculator
Net profit margin = Net profit after all expenses and taxes / Revenue x 100. On Rs 50 lakh annual revenue with Rs 45 lakh total costs (COGS + salaries + rent + marketing + taxes): net profit = Rs 5 lakh, net margin = 10%. This is strong for most businesses. Indian listed companies average 8-12% net margins.
Profit
₹400
Profit Margin
33.33%
Profit / Selling Price
Markup
50%
Profit / Cost Price
Margin % = (Profit / Selling Price) x 100. Markup % = (Profit / Cost Price) x 100. A 50% markup is only a 33.3% margin.
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Common questions about Net Profit Margin Calculator
What is the average net profit margin for Indian businesses?
Listed Nifty 50 companies average 10-15% net margins. IT services companies (Infosys, TCS): 20-25%. FMCG companies: 10-20%. Banks and NBFCs: 20-30% ROE basis (different metric). Manufacturing SMEs: 5-12%. Startups: often negative. Kirana stores: 2-5%. Context matters - compare within your business category and size.
How do taxes affect net profit margin?
Corporate tax in India for companies with turnover above Rs 400 crore: 25% (base rate) plus surcharge and cess, effective rate around 25.17%. For new manufacturing companies: 15% special rate. For most small businesses filing as proprietorship or partnership: personal income tax applies, with 30% slab for income above Rs 15 lakh. Tax as a % of pre-tax profit is significant in net margin calculation.
Should I focus on growing revenue or improving margin?
Improving margin is mathematically more powerful. A 5% margin improvement (from 10% to 15%) on Rs 50 lakh revenue is Rs 2.5 lakh more profit. Growing revenue by 20% (to Rs 60 lakh) at the same 10% margin is also Rs 1 lakh more profit - margin improvement wins. But in practice, revenue growth enables economies of scale that improve margins. Both simultaneously is the goal.