2 ASX Growth Stocks With Expanding Margins

Growth is easy to talk about. Profitability is harder to deliver. In equity markets, many companies can grow revenue for a while, but only a smaller group can do so while steadily improving margins. Expanding margins matter because they show a business is becoming more efficient, more disciplined, and better positioned to convert growth into lasting value.

On the ASX Growth Stocks two companies from very different industries illustrate this well: Ramelius Resources and Brambles. One operates in gold mining, the other in global logistics infrastructure. Yet both show how margin expansion can emerge from smart execution rather than just favourable conditions.

This blog explains why expanding margins are such a powerful signal, how each company is achieving it, and what data points investors should watch to judge whether these trends are sustainable.

Why expanding margins matter more than raw growth

Revenue growth tells you demand exists. Margin expansion tells you the business is improving how it serves that demand. When margins expand, it usually reflects a combination of:

1. Better cost control
2. Improved pricing or mix
3. Higher asset utilisation
4. Operational scale kicking in

Data across markets consistently shows that companies with rising margins tend to generate stronger returns on capital over time. They also gain flexibility. Higher margins give management room to reinvest, absorb shocks, or return capital without stressing the balance sheet.

For growth investors, margin expansion often changes how a company is valued. Earnings become more predictable, and the business looks less dependent on external factors.

Ramelius Resources: efficiency driving mining margins

Ramelius Resources operates several gold mines across Western Australia. Gold mining is often seen as a simple equation: production times price minus costs. In reality, margins depend heavily on discipline and sequencing.

Ramelius has focused on mining smarter rather than simply mining more. Its approach emphasises selective development, efficient processing, and tight control of operating costs.

Two main drivers influence margins for a gold producer:

1. All-in sustaining costs per ounce, including labour, fuel, maintenance, and consumables
2. Realised gold prices, which determine revenue per ounce

Recent operational data and company commentary show Ramelius maintaining cost discipline while sustaining production. When unit costs remain stable or fall while output holds steady, margins expand even if gold prices move sideways.

This is a key distinction. Margin improvement driven by efficiency is more durable than margin improvement driven purely by price cycles.

Structural factors supporting Ramelius’s margin profile

Several broader trends can support margin expansion for a company like Ramelius.

First, mining input cost inflation has moderated compared with earlier periods of supply-chain disruption. While costs remain elevated relative to long-term averages, the rate of increase has slowed, making cost planning more predictable.

Second, Ramelius operates at a scale where operational adjustments can be made relatively quickly. Smaller and mid-sized producers often have more flexibility to optimise mine plans, adjust processing strategies, and manage capital intensity.

Third, disciplined project sequencing helps protect margins. Bringing higher-grade zones into production without excessive upfront capital can lift average margins without increasing financial risk.

What to watch for Ramelius

To assess whether margin expansion is holding, investors should focus on a few practical data points:

1. All-in sustaining costs compared with realised gold prices
2. Consistency in production relative to guidance
3. Capital expenditure relative to output growth

If costs remain controlled while production stays stable, margin improvements are more likely to be structural rather than temporary.

Brambles: scale and operational leverage at work

Brambles operates one of the world’s largest pallet and container pooling networks. Its business looks very different from mining, but margin expansion here follows a similar logic.

Brambles provides reusable pallets and containers that circulate through customer supply chains. The economics of this model improve as scale and utilisation rise.

Margins expand when Brambles can:

1. Increase asset utilisation rates
2. Reduce servicing and transport costs per unit
3. Spread fixed costs across higher volumes

As throughput increases, each pallet generates more revenue relative to its cost base. This is classic operating leverage.

Why Brambles’s model supports margin expansion

Several features of Brambles’s business support improving margins over time.

First, network density matters. As the pallet network becomes more balanced geographically, fewer empty movements are required. This reduces transport costs and improves asset efficiency.

Second, recurring revenue plays a big role. Long-term contracts with large customers smooth demand and reduce pricing volatility. Predictable revenue makes it easier to plan cost reductions and productivity improvements.

Third, data and analytics increasingly support operational decisions. Brambles uses data to optimise pallet flows, track asset cycles, and reduce losses. Even small efficiency gains, when applied across millions of pallets, can materially improve margins.

What to watch for Brambles

Margin expansion at Brambles is less visible quarter to quarter, but it shows up in longer-term trends. Key indicators include:

1. Operating margin trends across regions
2. Asset utilisation and turnaround times
3. Cost inflation versus productivity improvements
4. Contract renewals and customer retention

Sustained margin gains suggest the company is successfully translating scale into efficiency.

Common themes behind both stories

Although Ramelius and Brambles operate in different sectors, their margin expansion stories share important similarities.

Cost discipline over growth for its own sake
Both companies focus on controlling what they can control. Ramelius manages mining costs and sequencing. Brambles manages logistics efficiency and asset use.

Scale applied thoughtfully
Growth only helps margins when it improves unit economics. Adding volume in the wrong places can dilute margins. Both companies appear selective in how and where they grow.

Stable demand foundations
Gold demand and pallet demand behave differently, but both offer a level of baseline stability. This predictability supports long-term cost optimisation.

How investors should think about expanding margins

Margin expansion does not guarantee share price performance, but it reduces reliance on favourable external conditions. Investors assessing margin-driven growth often ask:

1. Are margin gains repeatable or one-off?
2. Do management explanations align with the data?
3. Is the industry structure supportive of continued efficiency?

Positive answers to these questions increase confidence that growth is being built on solid foundations.

Growth that compounds

In the long run, markets tend to reward businesses that grow earnings efficiently rather than aggressively. Expanding margins signal that a company is learning, adapting, and improving its competitive position.

For Ramelius Resources, margin expansion reflects disciplined mining and cost control. For Brambles, it reflects scale, network effects, and operational leverage. Different paths, similar outcome.

When growth and efficiency move together, the result is often more resilient performance across cycles. That combination is what makes expanding margins such a powerful signal, regardless of industry or market conditions.

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