This study aims to explore the true nature of the impact of working capital management (WCM) efficiency, measured by cash conversion cycle (CCC), on the stock market performance (proxied by stock’s Alpha) of Indian non-financial firms. The article presents four possible models from literature and argues why the relationship should be non-linear. Generalized method of moments (GMM) estimation is used on firm-level data of 718 Indian firms from 11 industries listed in the Bombay Stock Exchange (BSE) from 2011 to 2017. A negative relationship is confirmed. However, contrary to prior findings, neither a quadratic relationship nor the deviations from industry median CCC can explain the relationship for Indian firms. Therefore, firms are divided into CCC decile-based equally weighted portfolios and estimation of a threshold level of CCC is carried out iteratively. Threshold thus obtained is validated at the firm level, using dynamic panel through GMM estimation. The novelty of this study is that it is the first one to propose the possibility of a universal threshold level of working capital (WC) efficiency and its impact on the market performance of firms in India. The article argues that in India, due to uncertainties in supply chains, firms, as well as the investors, prefer a threshold level of investment in WC. If CCC is above the threshold level, firms’ excess stock returns fall significantly, while there is no impact below the threshold level. The study is relevant for managers so that they can maintain WC below a threshold level, as well as for investors who can use the threshold WC criteria for valuation and selection of stocks.

这项研究旨在探讨通过现金转换周期（CCC）衡量的营运资金管理（WCM）效率对印度非金融公司的股票市场表现（由股票的Alpha代理）的影响的真实性质。这篇文章提出了来自文献的四种可能的模型，并论证了为什么这种关系应该是非线性的。2011年至2017年，孟买证券交易所（BSE）上市的11个行业的718家印度公司的公司级数据采用了广义矩估计（GMM）。证实存在负相关关系。但是，与先前的发现相反，二次关系或与行业中位数CCC的偏差都不能解释印度公司的这种关系。所以，将公司分为基于CCC的十分位数等权重投资组合，并以迭代方式估算CCC的阈值水平。通过GMM估算使用动态面板，可以在公司级别验证由此获得的阈值。这项研究的新颖之处在于，它是第一个提出普遍适用的营运资本门槛水平（WC）效率及其对印度公司市场绩效影响的建议。该文章认为，在印度，由于供应链的不确定性，企业以及投资者都倾向于对WC进行投资的门槛水平。如果CCC高于阈值水平，则企业的超额股票收益会显着下降，而低于阈值水平则没有影响。该研究与管理人员相关，因此他们可以将WC保持在阈值以下，