The 4th Quarter projected report is calculated based on the Average Pending amount per month which is calculated in the next slide of the presentation (attached below).
Even though it is beneficial to share the order completion status and remaining order amount, I don’t think using the average pending amount to project the next 3 months is a good measure. This is because most of the amount will be settled at the end of the project, and there are various reasons for postponing project completion.
Example: Nayara Energy contract’s start date of 24.08.2021 was projected for 35 months and only has 7 pending months.
Scenario 1 – If you consider that the contract is going to end as mentioned in the end date. 23.99 crore revenue was booked for 28 months, which is 0.85 crore per month. So in the remaining 7 months, 16.57 crore revenue is going to be generated, which is 2.36 crore per month.
Scenario 2 – If you consider there will be a delay in the completion of the project. For this scenario, and to calculate the revenue, we can only depend on the management’s comments on the particular project.
So for Q4, as Epitome Industries’ order is the highest, we can clearly see that the projected revenue was very low compared to the projection calculated using the average pending amount.
Please correct me if I am wrong as I am new to investing in this sector.
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