Operating expenses (SG&A)

Everything the company spends to run the business that isn't raw materials. Indian filings split this into two big lines: Employee cost and Other expenses.

What sits where

Employee cost = salaries, bonuses, PF contributions, ESOPs charged to P&L. For an IT services or pharma R&D company this is the single biggest cost line.

Other expenses = rent, electricity, freight on finished goods, advertising, professional fees, travel, repairs, insurance - basically everything else. For consumer companies, advertising sits here; for manufacturing, power and freight.

The shorthand "SG&A" (Selling, General & Administrative) groups all of this together. In Indian filings it's not labelled SG&A explicitly, but everything between gross profit and EBITDA is essentially SG&A.

Why this line matters

The COGS line tracks raw-material cycles. Operating expenses track management discipline. A company that holds employee cost flat while revenue grows 20% is showing operating leverage. A company whose other expenses grow 30% when revenue grows 10% is letting costs run.