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Exporters in the small and medium enterprise (SME) space earn higher operating profit margins (OPMs) compared to their peers, which cater only to the domestic market. This was revealed by a CRISIL SME Rating analysis. The key findings of this study indicated that a larger proportion of SME exporters have OPMs of more than 10 per cent than their counterparts selling in the domestic market.

For the study, more than 1,800 SMEs in agricultural and processed foods, engineering, leather, and textiles sector were analysed. The SME exporters chosen for the study derive at least 25 per cent of their turnover from exports and are net exporters.

In all the four sectors (agricultural and processed foods, engineering, leather, and textiles), a larger proportion of SME exporters have OPMs of more than 10 per cent than their counterparts selling in the domestic markets. Similarly, with regard to agricultural and processed food and leather sectors, a larger proportion of SME exporters have OPMs of more than 5 per cent in comparison to their peers serving only local markets, most of whom have OPMs of less than 5 per cent.

Agriculture and food processing

In case of the agricultural and processed food segment, 62 per cent of SME exporters have OPMs of more than 5 per cent vis-à-vis only 53

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