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INVESTMENT INSIGHTS

Check Before You Invest : City Online Services Ltd

BSE: 538674 NSE: ISIN: INE158C01014
  |   Sector:  Telecom   |   Industry:  Telecommunication - Service Provider

Snapshot

Q.1 Which industry/sub-sector does City Online Services Ltd belong to?
City Online Services Ltd belongs to the Telecom sector, operating specifically within the Telecommunication - Service Provider segment.
Q.2 Is City Online Services Ltd a good quality company?
City Online Services Ltd is a quality company, based on a multi-year financial track record.

This assessment is based on company’s performance on Revenue growth, ROCE, Equity and Assets, key margin ratios, cash conversion cycle, and debt to cash flow from operations and how it compares with its long term averages.

Q.3 Is City Online Services Ltd undervalued or overvalued?
City Online Services Ltd appears Fair, as its key valuation ratios are in line with their past averages.

Based on the industry it operates in, the relevant valuation ratios include one of the following, P/E, P/BV, P/Sales, EV/EBITDA or a combination of two or more.

Valuation Ratios Current 5-year
Historic Median
Price to Earnings - -
Price to Book -8.39 -6.51
Price to Sales 0.45 0.32
EV to EBITDA 15.34 3.53
Q.4 Is City Online Services Ltd a good buy now?
City Online Services Ltd is not a good buy now, based on weak price trend analysis suggesting prices may fall. However, you need to check its quality and valuation before making a decision

Performance Analysis

We have analysed the performance of the company on the following:

  • How has it performed on generating Profits?

    By checking its Revenue growth, Gross, Operating and Net Margins compared to its last 5-year median.

  • How efficiently has it utilized Capital?

    By checking its ROCE, ROA, ROE and its Cash Conversion Cycle.

  • How is it managing its Debt?

    By checking its Debt to Equity and Cash Flow from Operations.

A: What are the trends in revenue and profit margins?

Q.1 Revenue growth of City Online Services Ltd?
City Online Services Ltd revenue growth is -26.7% for FY-2025, which is below its 5-year CAGR of -8.33%, indicating slower growth.

Q.2 Gross Profit margin of City Online Services Ltd?
City Online Services Ltd Gross profit margin which is the profit after deduction of direct costs, is 7.6% for FY-2025, which is above its 5-year median of 4.7%, indicating increasing margins.

Q.3 Operating Profit Margin of City Online Services Ltd?
City Online Services Ltd Operating Profit Margin which is the profit after deduction of all operating costs, is 5.25% for FY-2025, which is above its 5-year median of -4.19% indicating increasing margins.

Q.4 Net Profit Margin of City Online Services Ltd?
City Online Services Ltd Net Profit Margin is 0.47% for FY-2025, is above its 5-year median of -2.05%, indicating increasing margins.
Current Level 5-year
Historic Median
Gross Profit Margin (%) 7.6 4.7
Operating Profit Margin (%) 5.25 -4.19
Net Profit Margin (%) 0.47 -2.05

B: Does the business utilize capital efficiently?

Q.5 Return on Asset of City Online Services Ltd?
City Online Services Ltd Return on Asset is 0.66%, which is above its 5-year historical median of -3.3%, indicating improved asset utilization efficiency.

Q.6 Return on capital employed (ROCE) of City Online Services Ltd?
City Online Services Ltd Return on capital employed is 37.05% for FY-2025, which is above its 5-year historical median of 24.96%. The current ROCE is above its estimated weighted average cost of capital (WACC) of 14%, indicating value creation.

Q.7 Return on Equity (ROE) of City Online Services Ltd?
City Online Services Ltd Return on equity is 0% for FY-2025, which is above its 5-year historical median of -30.93%, indicating the business is making better use of its shareholders capital.

Q.8 Cash conversion cycle of City Online Services Ltd?
City Online Services Ltd Cash conversion cycle is -246 days, above its 5-year historical median of -260 days, indicating deteriorated working capital management. However, you need to compare this with its peers in the industry.
Current Level 5-year
Historic Median
Asset Turnover (x) 1.41 1.41
ROE (%) - -30.93
ROCE (%) 37.05 24.96
Cash Conversion Cycle -246 days -260 days

C: How much debt does the business have and is it at a sustainable level?

Q.9 Debt to Equity ratio of City Online Services Ltd?
City Online Services Ltd Debt-to-Equity ratio is -13.12, which is lower the industry average of 0.00, indicating lower debt levels in the industry.

Q.10 Debt to cash flow from operations of City Online Services Ltd?
City Online Services Ltd Debt to cash flow from operations is 2.96, which is at a moderate level.

Ownership & governance

D: Promoter shareholding and pledge status of City Online Services Ltd?

Q.1 Promoter shareholding and pledge status of City Online Services Ltd?
Promoters hold 14.75% of the City Online Services Ltd, with 0.00% of their stake pledged, indicating no pledge risk.

Peer comparison (industry-wise, mcap)

E: How does City Online Services Ltd performance compare with that of its Peers?

Q.1 Revenue growth of City Online Services Ltd vs industry peers?
City Online Services Ltd revenue CAGR is -8.33%, compared to the industry median CAGR of 0.59%, indicating slower growth and losing its market share.
Profit Metrics
Current Level 5-year
Industry Median
Revenue Growth (%) -26.7 0.6
Gross Profit Growth (%) 18.8 10.8
Operating Profit Growth (%) 0 8.7
Net Profit Growth (%) 0 36
Operating Efficiency
Current Level 5-year
Industry Median
Asset Turnover (x) 1.41 0.88
ROE (%) - -
ROCE (%) 37.05 2.27
Cash Conversion Cycle (days) -245.89 -5

Valuation & price assessment

Q.1 Stock return of City Online Services Ltd over the last decade?
Over the last 9 year(s), the stock has delivered a CAGR of -2.7% based on the current price.
9Y 5Y 3Y 1Y
Share Price
CAGR		 -2.7% 28.3% 22.1% -29.2%
Q.2 Valuation ratios of City Online Services Ltd vs historical?
The current P/E ratio of 0 is in line with than its historical median of , indicating that the stock is trading near its historical average valuation.
Q.3 How do the current valuation ratios compare with 5-year historical median and industry numbers?
Valuation Ratios Current 5-year
Historic Median		 5-year
Industry Median
Price to Earnings - - 19.24
Price to Book -8.39 -6.51 0.68
Price to Sales 0.45 0.32 2.17
EV to EBITDA 15.34 3.53 12.27

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10. City Online Services

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