Designers follow iterative methodology for exhaust manifold design, in which designer makes a design based on his experience and intuition for given operating conditions and other input data. This design is analyzed in finite element analysis (FEA) software ANSYS and checked for yield margins (i.e., if stresses induced in the manifold are greater than the yield strength of the material the exhaust manifold design fails). If design is found to be failing then the designer makes modifications accordingly. New design is again checked in FEA software for yielding. This procedure is continued till all constraints are satisfied. Generally such a procedure takes many iterations and hence time, and as an output we get a feasible solution but not an optimal solution. A finite element (FE) thermo-structural analysis is carried on the manifold and yield margins are calculated. Most of the manifolds yield due to material behaviour at high temperatures. Conventionally linear elastic analysis approach is followed. Linear elastic approach considers linear stress-strain relationship even beyond the yield limit. So the objective is to develop a new approach (elasto-plastic) which is more accurate and captures the actual material behavior beyond the yield limit. Finding the temperature dependent material properties is to be undertaken. Correlation of the yield margins by both the approaches is done. Using elasto-plastic analysis approach the yield margins are improved by 57.8% and this reduces the number of iterations needed to be undertaken by the designer.