The disclosure rule (all three regimes agree): if revenue from a single external customer is ≥10% of total revenue, the company must disclose that fact, the amount, and the segment. It doesn't have to give the name (Ind AS 108 para 34 / IFRS 8 para 34 / ASC 280-10-50-42). You'll find it at the tail of the segment note. Cross-check it against the risk factors: Item 1A of the 10-K, or the risk sections of a DRHP or AR, which often give top-1/5/10 tables. Then read the receivables concentration note. A customer who is 60% of receivables is your real creditor exposure.
How does a dominant customer affect a supplier's economics?
How to translate concentration into economics. A dominant customer holds the pen on your P&L. It imposes annual "cost-down" pricing, and auto OEMs contractually extract 2 to 5%/yr from ancillaries this way. It stretches payables, so its working capital optimisation becomes your borrowing. It controls the spec. And it holds the cliff: insourcing, dual-sourcing, or loss of the account. Analysts use rough calibration bands here. A single customer >10% means flag and monitor. At >25%, the relationship is a core input to your thesis, so underwrite the customer's health too. At >50% you're analysing a captive supplier. Its margin is an allowance granted by its customer, and the multiple should never leave the teens of discount territory, whatever its current profitability.
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Customer concentration examples
Some specimens. Cirrus Logic discloses one customer, Apple, at ~87% of net sales (10-K, check the current year). Superb engineering, permanent strategic fragility, and the market prices it accordingly. At Dixon Technologies, anchor mobile clients each cross the 10% line (check the current Ind AS 108 note), which shows that concentration is the cost of admission in EMS. Aarti Industries saw a marquee multi-year take-or-pay contract terminated, with compensation of roughly ₹630 cr disclosed across FY22 to FY23 (check in the AR). Even compensated cliffs reprice the story. For the constructive version, look at Samvardhana Motherson. After living through the Audi/VW dependence of the 2010s, it explicitly manages to internal caps. Its stated ambition is that no single customer/country/component dominates, historically framed as no more than ~10 to 15%.
When management names a concentration policy, the risk is being governed. When the 10-K lists an unnamed "Customer A" at 40% and the MD&A never mentions it, the risk is being hidden.
Is supplier or platform concentration a risk too?
Also read concentration sideways. Supplier concentration covers one API vendor, one licensor, TSMC for the fabless world. Platform concentration is a D2C brand that's 80% one marketplace's algorithm. And Phase 7 will preview geography concentration: one export market, one regulator.