What is EBITDA ?
EBITDA = Earnings Before Interest, Taxes, Depreciation, and Amortization . It is a financial metric used to measure a company's core operating profitability before the impact of: Interest (financing decisions) Taxes (tax regulations) Depreciation (wear and tear of tangible assets) Amortization (write-off of intangible assets) Formula EBITDA = Net Profit + Interest + Taxes + Depreciation + Amortization Why is EBITDA used? Compares operating performance across companies. Removes the impact of financing structure and tax differences. Often used in valuations, mergers & acquisitions, and project finance analyses. Example If a company has: Net Profit = ₹100 Cr Interest = ₹20 Cr Tax = ₹30 Cr Depreciation = ₹15 Cr Amortization = ₹5 Cr Then: EBITDA = 100 + 20 + 30 + 15 + 5 = ₹170 Cr In Power Sector Projects For utilities such as APTRANSCO, DISCOMs, renewable energy projects, and BESS projects, EBITDA is often used to: Assess operational efficiency. Compare project profitability....