Basically management guidance was to maintain collections growth ~20-30% which started dipping below 20% since Q3’FY24 and they said they were still confident but it just kept getting lower every quarter. The reason for drop was lower net addittion of subscriber due to higher churn rates which the management themselves did not know how to solve. And Q2’FY25 results seem good but collection growth was 6%.
Unless collections growth/net adittion of subscribers don’t improve there is no way stock will go upward. Net adittion of subscribers since last 4 quarters have just been 2K QoQ, it needs to be atleast 5-8K QoQ for performance to improve.
The margins itself were higher just because less customer added so lesser customer acquistion costs, so margins will go down (even mgmt said so) once net adittion improves.
P.S: If you’re wondering why collection growth is important, it is basically a leading indicator for future revenues.
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