Granite Materials: Is the Growth Worth What It Costs?
Granite Materials sells building materials subscriptions in India. Growth has been strong and the board has asked whether it is profitable growth.
Marketing spends ₹139 Cr a month and acquires about 2,776 new customers in that time. Average revenue per user is ₹3643 a month at a 69% gross margin. Monthly logo churn runs at 6.8%.
Roughly 52% of new customers come through paid channels; the rest arrive organically but are counted in the same blended figure. The CMO reports a healthy LTV/CAC and wants to double the budget.
spend
- new customers per month
- 2776
- monthly marketing spend cr
- 139
- paid share of new customers pct
- 52
economics
- arpu monthly
- 3643
- gross margin pct
- 69
- monthly churn pct
- 6.8
derived hints
- blended cac
- 500720
- payback months
- 199.2
- ltv gross margin basis
- 36951
- implied lifetime months
- 14.7
Advise the board. Your answer should provide:
- Analysis — CAC, LTV on a margin basis, the ratio, and payback in months. Show the working.
- Risks — what the blended number is hiding.
- Recommendation — scale, hold or cut, and where.
State any assumptions you make.
80 points, 60% to pass.
- recommendation20
- market analysis20
- risk assessment15
- financial analysis25
Reveal suggested structure
CAC = spend / customers acquired. LTV = ARPU x gross margin x 1/churn. Judge on payback period and on unblended channel economics.