Garudvahan Aerospace has eight years of orders, but production problems have cut deliveries by 20% and it carries net debt. Is it a good investment? Give a two-line thesis on the spot.

Not at today's price, on these facts. Line one: Garudvahan's problem is its factory, not its demand, because eight years of orders are worth only what it can deliver and a 20% delivery cut halves operating profit. Line two: at 24 times plan earnings the market is already paying for a full recovery, and interest cover of 1.1 times leaves the balance sheet little time to wait for it.

A view, the reason for it, and the one thing that would change it. Two lines force you to pick the single variable that decides the stock, and here that variable is delivery rate, not demand. Think of a restaurant with a queue round the block and a broken oven: the queue proves people want the food, but the bill is paid by meals served. Candidates who open with the backlog have described the queue.

A backlog is revenue promised for later, and it turns into cash only at the rate the factory can ship. At Rs 8,000 crore a year the Rs 80,000 crore backlog takes 10 years to clear instead of 8, and after five years Rs 40,000 crore is still waiting rather than Rs 30,000 crore. Money received two years later is worth less, and customers kept waiting can cancel, renegotiate prices or claim late-delivery penalties, so part of the backlog quietly loses value while it waits.

This is where the two lines get their force. Revenue falls by Rs 2,000 crore, and with variable costs at 70% only Rs 600 crore of cost goes with it. Operating profit falls from Rs 1,200 crore to Rs 600 crore, half, on a 20% fall in output. Against Rs 540 crore of interest on the Rs 6,000 crore of net debt, cover drops from 2.2 times to 1.1 times, and net income falls from about Rs 495 crore to about Rs 45 crore.

Name the evidence, not a feeling. The view turns when monthly deliveries climb back towards the plan rate at a price that does not already assume it. The signs to watch are the castings supplier's output, the quality hold being lifted, and deliveries per month for two or three quarters. If the price fell to, say, 15 times plan earnings while those signs improved, the same facts would support the opposite answer. Close the thesis by saying that out loud: it shows the interviewer you know which number you are betting on.

Say the limit too. This view ignores new orders, the value of the aftermarket parts business most aircraft makers run, and any penalties in customer contracts, all of which you would ask for with more time. The two lines are a starting position, not a verdict.