I really wonder how did they arrive at order book (someone need to ask in next concall). Haven’t seen any other auto component company talking about “order backlog”. This concept of order backlog only work for discrete project companies like L&T or Thermax etc. Most of the auto companies given Open PO ie. only per piece rate is given. Actual quantity to be supplied is communicated via schedules – one month fixed, rest 2 months tentative. These schedule change all the time…Hence any auto component supplier has visibility of max 3 months.
It may be that post ERP implementation, PO can not be released without entering annual quantity so companies tend to over estimate their requirement and put some quantity numbers (but they are not bound by that as it is always considered EAU – Estimated Annual Usage). So Sona may be adding up all these optimistic order values to arrive at order backlog. If so, it would be clearly a pipe dream.
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