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Zenith Drugs (NSE:ZENITHDRUG) Degree of Operating Leverage : 6.56 (As of Mar. 2024)


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What is Zenith Drugs Degree of Operating Leverage?

Degree of Operating Leverage (DOL) measures the percentage change in EBIT for a unit change in Revenue. Zenith Drugs's Degree of Operating Leverage for the quarter that ended in Mar. 2024 was 6.56. The higher Degree of Operating Leverage, the higher operating risk the company will take.

The industry rank for Zenith Drugs's Degree of Operating Leverage or its related term are showing as below:

NSE:ZENITHDRUG's Degree of Operating Leverage is ranked worse than
82.98% of 952 companies
in the Drug Manufacturers industry
Industry Median: 0.62 vs NSE:ZENITHDRUG: 6.56

Zenith Drugs Degree of Operating Leverage Historical Data

The historical data trend for Zenith Drugs's Degree of Operating Leverage can be seen below:

* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD.
* For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.

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Zenith Drugs Degree of Operating Leverage Chart

Zenith Drugs Annual Data
Trend Mar21 Mar22 Mar23 Mar24
Degree of Operating Leverage
- 0.23 0.92 6.56

Zenith Drugs Semi-Annual Data
Mar21 Mar22 Mar23 Sep23 Mar24
Degree of Operating Leverage - 0.23 0.92 - 6.56

Competitive Comparison of Zenith Drugs's Degree of Operating Leverage

For the Drug Manufacturers - Specialty & Generic subindustry, Zenith Drugs's Degree of Operating Leverage, along with its competitors' market caps and Degree of Operating Leverage data, can be viewed below:

* Competitive companies are chosen from companies within the same industry, with headquarter located in same country, with closest market capitalization; x-axis shows the market cap, and y-axis shows the term value; the bigger the dot, the larger the market cap. Note that "N/A" values will not show up in the chart.


Zenith Drugs's Degree of Operating Leverage Distribution in the Drug Manufacturers Industry

For the Drug Manufacturers industry and Healthcare sector, Zenith Drugs's Degree of Operating Leverage distribution charts can be found below:

* The bar in red indicates where Zenith Drugs's Degree of Operating Leverage falls into.


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Zenith Drugs Degree of Operating Leverage Calculation

Zenith Drugs's Degree of Operating Leverage for the quarter that ended in Mar. 2024 is calculated as:

Degree of Operating Leverage=% Change in EBIT**/% Change in Revenue
=( 154.439 (Mar. 2024) / 78.042 (Mar. 2023) - 1 )/( 1316.197 (Mar. 2024) / 1145.19 (Mar. 2023) - 1 )
=0.9789/0.1493
=6.56***

* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD.
* For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.

** TTM data of EBIT and Revenue was used to calculate Degree of Operating Leverage.
*** Please be aware that the Degree of Operating Leverage calculations are based on company-level data using the primary share class. The calculated data provided is for demonstration purposes and may slightly differ from the results displayed in the title due to potential variations caused by currency exchange rate differences throughout the year.


Zenith Drugs  (NSE:ZENITHDRUG) Degree of Operating Leverage Explanation

Degree of Operating Leverage (DOL) is a leverage ratio that measures the sensitivity of a company’s operting income, also referred to as Earnings Before Interest and Taxes (EBIT), to fluctuations in its Revenue. DOL is a method used to quantify a company’s operating risk. This risk is related to the company's structure of variable costs and fixed costs. Since the fixed costs do not allow the company to adjust the operating costs, the operating risk rises with a higher fixed-to-variable costs proportion.

A high Degree of Operating Leverage indicates that the company’s fixed costs exceed its variable costs. By increasing the sales, the company can earn more profits. In addition, the company must be able to maintain relatively high sales to cover all fixed costs.

Be Aware

The use of operating leverage varies across different industries and business sectors, and the application of Degree of Operating Leverage (DOL) should be adjusted accordingly.


Zenith Drugs Degree of Operating Leverage Related Terms

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Zenith Drugs Business Description

Traded in Other Exchanges
N/A
Address
K. No. 72 / 5, Village Muradpura, NA Depalpur, Indore, MP, IND, 453001
Zenith Drugs Ltd is a pharmaceutical manufacturing and trading company. It offers a wide range of formulations in various forms such as ORS Powder, Liquid Orals, Ointments, Liquid Externals, and Capsules. It is also into Generic Medicines.

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