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INVESTMENT INSIGHTS

Check Before You Invest : Fone4 Communications (India) Ltd

BSE: 543521 NSE: ISIN: INE0L3H01014
  |   Sector:  Retail   |   Industry:  e-Commerce

Snapshot

Q.1 Which industry/sub-sector does Fone4 Communications (India) Ltd belong to?
Fone4 Communications (India) Ltd belongs to the Retail sector, operating specifically within the e-Commerce segment.
Q.2 Is Fone4 Communications (India) Ltd a good quality company?
Fone4 Communications (India) 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 Fone4 Communications (India) Ltd undervalued or overvalued?
Fone4 Communications (India) 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 1.25 0.72
Price to Sales 0.34 0.17
EV to EBITDA -8.38 -5.36
Q.4 Is Fone4 Communications (India) Ltd a good buy now?
Fone4 Communications (India) 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 Fone4 Communications (India) Ltd?
Fone4 Communications (India) Ltd revenue growth is -59% for FY-2025, which is below its 5-year CAGR of 0.32%, indicating slower growth.

Q.2 Gross Profit margin of Fone4 Communications (India) Ltd?
Fone4 Communications (India) Ltd Gross profit margin which is the profit after deduction of direct costs, is -5% for FY-2025, which is below its 5-year median of -1.5%, indicating decreasing margins.

Q.3 Operating Profit Margin of Fone4 Communications (India) Ltd?
Fone4 Communications (India) Ltd Operating Profit Margin which is the profit after deduction of all operating costs, is -4.6% for FY-2025, which is below its 5-year median of -3.07% indicating decreasing margins.

Q.4 Net Profit Margin of Fone4 Communications (India) Ltd?
Fone4 Communications (India) Ltd Net Profit Margin is -5.46% for FY-2025, is below its 5-year median of -1.89%, indicating decreasing margins.
Current Level 5-year
Historic Median
Gross Profit Margin (%) -5 -1.5
Operating Profit Margin (%) -4.6 -3.07
Net Profit Margin (%) -5.46 -1.89

B: Does the business utilize capital efficiently?

Q.5 Return on Asset of Fone4 Communications (India) Ltd?
Fone4 Communications (India) Ltd Return on Asset is -8.92%, which is below its 5-year historical median of -4.29%, indicating deteriorated asset utilization efficiency.

Q.6 Return on capital employed (ROCE) of Fone4 Communications (India) Ltd?
Fone4 Communications (India) Ltd Return on capital employed is -33.24% for FY-2025, which is below its 5-year historical median of -12.77%. The current ROCE is below its estimated weighted average cost of capital (WACC) of 14%, indicating value preservation.

Q.7 Return on Equity (ROE) of Fone4 Communications (India) Ltd?
Fone4 Communications (India) Ltd Return on equity is -57.72% for FY-2025, which is in line with its 5-year historical median of -57.72%, indicating the business is making similar use of its shareholders capital.

Q.8 Cash conversion cycle of Fone4 Communications (India) Ltd?
Fone4 Communications (India) Ltd Cash conversion cycle is -89 days, below its 5-year historical median of -20 days, indicating improved working capital management. However, you need to compare this with its peers in the industry.
Current Level 5-year
Historic Median
Asset Turnover (x) 1.63 1.63
ROE (%) -57.72 -57.72
ROCE (%) -33.24 -12.77
Cash Conversion Cycle -89 days -20 days

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

Q.9 Debt to Equity ratio of Fone4 Communications (India) Ltd?
Fone4 Communications (India) Ltd Debt-to-Equity ratio is 0.72, which is above the industry average of 0.11, indicating higher debt levels in the industry.

Q.10 Debt to cash flow from operations of Fone4 Communications (India) Ltd?
Fone4 Communications (India) Ltd Debt to cash flow from operations is -143.28, which is at a unhealthy level.

Ownership & governance

D: Promoter shareholding and pledge status of Fone4 Communications (India) Ltd?

Q.1 Promoter shareholding and pledge status of Fone4 Communications (India) Ltd?
Promoters hold 49.10% of the Fone4 Communications (India) Ltd, with 0.00% of their stake pledged, indicating no pledge risk.

Peer comparison (industry-wise, mcap)

E: How does Fone4 Communications (India) Ltd performance compare with that of its Peers?

Q.1 Revenue growth of Fone4 Communications (India) Ltd vs industry peers?
Fone4 Communications (India) Ltd revenue CAGR is 0.32%, compared to the industry median CAGR of 0.00%, indicating faster growth and gaining its market share.
Profit Metrics
Current Level 5-year
Industry Median
Revenue Growth (%) -59 0
Gross Profit Growth (%) 0 20.6
Operating Profit Growth (%) 0 25.4
Net Profit Growth (%) 0 30.3
Operating Efficiency
Current Level 5-year
Industry Median
Asset Turnover (x) 1.63 0.5
ROE (%) -57.72 10.08
ROCE (%) -33.24 7.66
Cash Conversion Cycle (days) -89.18 9

Valuation & price assessment

Q.1 Stock return of Fone4 Communications (India) Ltd over the last decade?
Over the last 3 year(s), the stock has delivered a CAGR of 15.55% based on the current price.
9Y 5Y 3Y 1Y
Share Price
CAGR		 - - 15.6% -32%
Q.2 Valuation ratios of Fone4 Communications (India) 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 - - 31.46
Price to Book 1.25 0.72 5.00
Price to Sales 0.34 0.17 7.95
EV to EBITDA -8.38 -5.36 18.70

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