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1/ Math update: 3.5 lakh cr invested. Need 35k cr EBIT at 10%ROCE. Rs 1030 sub/pa or 85 sub/pm EBIT (34 cr subs). ARPU hasn’t changed. Investing Aramco proceeds compounds the problem. So mostly will be used for debt pay down. Tariff increase only way to go. Let’s see what happens
2/ Key question is if tariffs are raised beyond a point, will India’s price conscious user base pay more, consume less or somewhere in between? We may have anecdotal answers but the truth is that we don’t know + 10% ROCE assumed above is pre-tax and not deserving of premium valn.
3/ Irrespective, selling cash flow generating assets which funded your startup to pay down debt shows stress regardless of whatever you hear. How this plays out remains to be seen /end
