THREAD
1. On Serum Institute of India, which is among the highest profit margins in India, among companies with a turnover of over Rs. 5,000 crores (h/t @AnilKSood5 )
SII’s operating margin (operating profit/turnover) has NEVER fallen below 50 per cent ever since fiscal 2012!
1. On Serum Institute of India, which is among the highest profit margins in India, among companies with a turnover of over Rs. 5,000 crores (h/t @AnilKSood5 )
SII’s operating margin (operating profit/turnover) has NEVER fallen below 50 per cent ever since fiscal 2012!
2. SII is not a very large company - its total sales (2020) was just a little less than Rs. 6,000 crores. In comparison Tata Steel’s turnover was 1.4 lakh crores! But what is striking is its strike rate — its profit/turnover ratio.
3. In fact its average net profit margin (net profit/turnover) in the last decade has been about 44 %. Now, having enjoyed that kind of normal profit, one can sympathise with Poonawala when says he would like to make super profits!
4. The misunderstanding that SII spends heavily on “risky” R&D and is therefore entitled to high profits, is not borne out by facts. The company’s average R&D spend as proportion of turnover in the last decade has been just 2.4%.
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