Vornix EdTech spends Rs 12,000 to acquire a customer paying Rs 500 a month at a 30% gross margin, with 4% monthly churn, and trades at 8x sales. Build the unit economics and make the short case.

Each Vornix customer earns about Rs 3,750 of gross profit and costs Rs 12,000 to win, so every new customer destroys about Rs 8,250. Lifetime value is 0.31x acquisition cost against a healthy 3x. Just to replace churners, Vornix spends about Rs 576 crore a year against Rs 180 crore of gross profit. At 8x sales the market prices economics the company does not have: growth burns value.

Follow one customer from signing up to leaving. A gym that pays Rs 12,000 in referral bonuses for each new member, who pays Rs 500 a month and quits after about two years, can never earn back the bonus if most of that Rs 500 goes on trainers. Rs 500 at a 30% margin is Rs 150 a month of gross profit; 4% monthly churn means the average customer stays 25 months; so lifetime valueThe gross profit a customer is expected to generate over the whole time they stay, before the cost of winning them. is Rs 150 x 25 = Rs 3,750. Against Rs 12,000 of acquisition cost, that is a loss of about Rs 8,250 on every new subscriber, before any head office cost.

Solve for each lever alone. To break even, churn would have to fall from 4% to 1.25% a month, or acquisition cost fall from Rs 12,000 to Rs 3,750, or gross margin rise to 96%. None of these is a small fix. A tutoring business cannot run at a 96% margin, and cutting churn by two-thirds means most families keeping the subscription for six years. The bulls must believe in some mix of all three, and the deck gives no cohort data to support any of them.

Here is the part that decides the short. With 10 lakh subscribers and 4% churn, 40,000 leave every month, so Vornix spends about Rs 576 crore a year replacing them, against Rs 180 crore of gross profit from the whole base. That is a burn of about Rs 396 crore a year before any salaries or rent, and it buys no growth at all. Every extra subscriber added makes the burn worse, which is why subscriber growth, the number the deck leads with, is the wrong thing to celebrate.

The thesis in one line: Vornix is valued at 8x sales, about Rs 4,800 crore, as if customers were profitable, when each one loses about Rs 8,250. The catalyst is funding: a business burning several hundred crore a year must raise money, and a raise at a lower price, or a cut in marketing that shows growth stalling, forces the market to look at unit economics. The risks are real. Older cohorts may churn far less than 4%, which would lift lifetime value; a price rise could pass; a strategic buyer could pay for the brand; and loss-making growth stocks can rally hard, so a short like this is sized small, with borrow cost checked and a stop agreed before entry.