This converter handles the three core profitability numbers small businesses, freelancers, and consultants juggle constantly: revenue (top line), profit (bottom line), and margin (profit divided by revenue, expressed as a percentage). Enter any two and the third is derived.
For Indian SMEs and solopreneurs, knowing the margin numbers cold is the difference between survival and growth. A retail shop with ₹50 lakh annual revenue and 5% net margin makes ₹2.5 lakh profit — barely above a salaried equivalent. The same ₹50 lakh revenue at 25% margin (achievable in services, content, software) is ₹12.5 lakh — a different business entirely. Use this converter to model what margin you need to hit your target profit at your current pricing, or what price you need to charge to hit a target margin at current cost structure.
Three Indian-context layers to remember when computing margins. GST is NOT revenue — it flows through to government. Direct taxes (income tax under presumptive 44AD/44ADA, or regular slab + 4% cess) reduce net margin further. And for businesses under ₹2 crore turnover, the presumptive taxation scheme allows declaring 6-8% of gross receipts as taxable income — simpler accounting but may be lower than your actual margin.
Frequently Asked Questions
What’s the difference between revenue, profit, and margin?
Revenue = total sales. Profit = revenue minus all costs. Margin % = profit ÷ revenue × 100. A business with ₹10 lakh revenue and 20% margin makes ₹2 lakh profit; the other ₹8 lakh covers costs (rent, salaries, COGS, taxes).
Gross margin vs net margin vs operating margin?
Gross margin = (Revenue − COGS) ÷ Revenue. Operating margin = Operating profit ÷ Revenue (after rent, salaries). Net margin = Net profit ÷ Revenue (after taxes and interest). Each layer reveals where money goes.
What’s a healthy margin in Indian businesses?
Retail (FMCG/grocery): 2-5% net margin. Restaurants: 8-15%. Software/SaaS: 20-40%. Consulting: 30-50%. Manufacturing: 6-12%. Real estate brokerage: 15-25%.
No. GST is collected from customers and remitted to government — it’s a pass-through. Your revenue is the pre-GST invoice value. Cash-basis vs accrual accounting may shift when revenue is recognised.
Each line tells a different story: Gross Margin shows product economics, EBITDA shows operational efficiency, EBIT shows asset utilisation, and PAT (Profit After Tax) is what the shareholders actually keep. Indian listed companies are taxed at 25.17% (Sec 115BAA) or 22% for new manufacturing companies (Sec 115BAB).
Revenue & Profit — FAQ
What is a good net profit margin in India?
It varies by industry: IT services (15–25%), FMCG (10–15%), manufacturing (5–10%), retail (2–5%), banking (20–30% ROE-based). Indian mid-cap companies average 8–12% PAT margin. E-commerce and new-age companies often operate at negative margins while scaling.
What is the corporate tax rate in India?
Existing companies: 25.17% (25% + surcharge + cess) under Sec 115BAA. New manufacturing companies: 17.01% under Sec 115BAB. Small businesses (turnover < ₹400 Cr): 25% base rate. MAT (Minimum Alternate Tax) is 15% of book profit for companies otherwise paying below that.
What does EBITDA tell you?
EBITDA (Earnings Before Interest, Taxes, Depreciation and Amortisation) measures core operating profitability before capital structure (debt), tax jurisdiction, and asset accounting (depreciation) differences. It’s the most used metric for comparing companies across industries and for valuation multiples (EV/EBITDA).
