Huge order books: These companies' order books are higher than their market caps, watch out!
Here is a list of companies whose order book is greater than their current market capitalization
Introduction:
An order book is a critical tool for businesses that rely on sales and revenue generation. It provides a snapshot of future sales commitments and plays a pivotal role in shaping a company's financial health. In this note, we will explore the importance of an order book for companies and how it contributes to revenue visibility.
Definition of an Order Book:
An order book is a comprehensive record of all the firm purchase commitments made by customers. It contains detailed information about orders, including order quantity, delivery dates, pricing, and terms of sale.
Revenue Visibility:
Revenue visibility refers to a company's ability to forecast and anticipate its future revenues with a high degree of accuracy. It is a crucial aspect of financial planning and management.
Importance of an Order Book for Revenue Visibility:
a. Predictability: An order book provides a clear picture of upcoming sales, enabling a company to predict future revenue streams. This predictability is essential for budgeting, resource allocation, and growth planning.
b. Financial Planning: With a well-maintained order book, a company can make informed financial decisions. It helps in setting realistic revenue targets, managing cash flow, and determining investment priorities.
c. Inventory Management: Companies can optimize inventory levels based on the orders in the book. This prevents overstocking or understocking of products, reducing carrying costs and potential losses.
d. Supplier Relationships: Knowing the future demand allows a company to communicate effectively with suppliers. This can lead to better negotiation terms, volume discounts, and improved supply chain efficiency.
e. Investor Confidence: A robust order book can instill confidence in investors and shareholders. They are more likely to invest in or support a company with a visible path to revenue growth.
Here is a list of companies whose order book is greater than their current market capitalization
|
Company Name
|
CMP in Rs
|
Market Cap in Rs Cr
|
Order book in Rs Cr
|
Period
|
|
Likhita Infrastructure
|
338
|
1,332
|
1,425.30
|
March 31, 2023
|
|
Markolines Pavement Technologies
|
146
|
280
|
385
|
March 31, 2023
|
|
Oriental Rail Infrastructure
|
88.8
|
478
|
1,211.89
|
March 31, 2023
|
|
NCC
|
155
|
9,735
|
54,110
|
June 30, 2023
|
|
J Kumar Infraprojects
|
432
|
3,272
|
14,351
|
June 30, 2023
|
|
Vishnu Prakash R Punglia
|
172
|
2,150
|
3,467
|
March 31, 2023
|
Conclusion:
In conclusion, an order book is a vital tool for companies seeking to maintain revenue visibility. It offers predictability, aids in financial planning, and contributes to effective business operations. However, it should be managed diligently and complemented with a well-structured sales strategy to maximize its benefits. Companies that prioritize order book management are better positioned to navigate the complexities of the business environment and achieve sustained growth.
Disclaimer: The article is for informational purposes only and not investment advice.