[hw_tw]

The question related to high receivables of 1400 Cr is actually for Sep quarter

Foor Dec quarter this number is around 2000 Cr … It indicates these things …

– The questions were prepared long back, but at that time the sentiment was positive with price rising and they were waiting for the right time (price falling) to conduct this interview and ask these questions just to prove their point … Also clearly visible with their tone and rudeness

– The interviewer hasn’t bothered to update the question or was just lazy and copying it from someone’s questions list

– Interviewer also said “there are handful of other problems as well” … indicates their pre-determined view about the company

Coming on to the receivable days, In the last conference call Mr. YSR, CFO of BCG has clearly mentioned that these receivables are largely pertaining to the latest Q3 quarter business …

This means there are no bad receivables … In my view, this is absolutely fine considering the nature of the business … Anyway, this will be decreasing in coming quarters as their sales come down because of seasonality of the business

Also as I mentioned before this is actually positive and advantageous to the company compared to their peers …as now that the company is able to overcome this high working capital and receivable days requirements and is able to generate FCF too

If you are comparing this Working Capital and Receivable Days with a Software Services company … generally they get some upfront payment and some part payments based on milestones achieved

For example, let’s say there is a 10 Cr order … the payment terms will be like 10% upfront, 20% on milestone 1, 30% on milestone 2 and final 40% on final delivery and acceptance … The acceptance period will be for 2 to 3 weeks, post that there will be around a month for the final payment … So in most cases they will be getting final payment in the same quarter of work completion … If you calculate the he receivable days it will be one or max two months

Also in this case there is no other working capital need apart from employee salary expenses

But, in case of BCG their business is different and works differently … they have to make an upfront payment to Publishers to purchase inventory / ad slots … They then sell (or rather agree to consume) this inventory to Media Agencies or Digital Marketers or directly sell it to brands … the payment periods would differ for each of these parties and is higher for Agencies as they have to in turn sell it and get their payment post the actual consumption of ad slots

The sequence of events and their possible time frames are give below … (Disc: I am a s/w person and my knowledge in this business is limited … there could be some errors in my understandings)

– BCG purchases bulk inventory / ad slots from FB … Day 0

– BCG sells a portion of this inventory to Media Agency … Timeframe 1 to 7 days as they would have already purchased it basis prior inventory demand from Agencies and other customers

– Agencies sells this inventory to Digital Marketers or Brands … Note that these transactions between BCG and MA, DM and Agencies are not actual sales, they are just agreements allowing brands to “consume” their inventory … Timeframe of 1 to 2 weeks

– Brands / DMs run a campaign … Timeframe of two weeks to more than a month depending on type of campaign

– Final result is evaluated in terms of actual consumption, quality … the real consumption is agreed between the parties … Timeframe of week or two

– Invoice is raised at the end of campaign or for a set of campaigns at the end of month or quarter and the payment is received in few weeks to month post that

Note that payments are received from Brands to DM first … Then DM to MA … Further from MA to BCG and again there is a time delay from invoice to actual payment between these parties

As you can see above the time delay is because of multiple parties involved and the final payments are happening only after the actual consumption of the inventory and not on mere agreement of consuming it … All this also leading to high working capital as explained by SKR

Hope we understand and agree why BCG has high working capital needs and high receivable days

In other real world metaphor … Its like a Rice Miller getting paid after the end customer has actually consumed rice … 🙂

In more detailed explanation … Its like a Miller purchasing it from farmer at a discounted rate with upfront payment … Miller then sells it to wholesaler … who in turn sells it Retailers … who inturn sells it to end customers … and the customers pays back ONLY after Consuming rice at the end of the month provided feedback / quality is matching to initial promise by the retailer

Imagine the amount of working capital requirement and receivable days of the Miller in this business scenario … 🙂

[hw_tw]

Why there are no MF investments in your company?

Are we looking for a validation that if MFs are investing then company is good otherwise it is bad?

Please also ask yourself some other questions

– Why foreign investors are investing and why Indian MFs haven’t yet entered in big way … are FIIs bad judges of stocks

– Why ICICI Prudential has entered recently and why not before at lower price … Is ICICI a bad judge of stock picking and other MFs are good or vice versa

– Why Mr. Shankar Sharma has invested and why not others

– What about MFs who have invested in many wealth destroyers like Unitech, Suzlon, HFCL in 2000, Reliance Capital, Communication and all ADAG stocks in 2000s … there are many others which MFs have invested when the stock prices are in peak and with high valuations … One more example of all recent IPOs with abnormal valuations and heavy investments of MFs in these companies and in the process also luring lot of innocent investors who are relatively new to the market, initially in the form of IPO and later in the form SIPs … Who would take responsibility for this debacle

“MFs are subject to Market Risk” …

There is no guarantee that MFs are risk free and would invest only in good companies … There are many funds which have destroyed wealth too, but no one talks much about that

Same is the case with Marquee or FII investors too

There is never a guarantee that investments by any of these parties means this company is good otherwise it is bad

If you believe that MFs are zero risk and you want to invest only when they had invested please continue doing so and stay away till your event is triggered … but don’t assume and paint a picture that the company is bad just because someone has not yet invested

Listen to everyone both negative, positive and balanced views from people like Logan, CI, Headstead and many others … But, in the end you have to make your own investment decisions … don’t live on a borrowed conviction

[whyShares]

Clarification BCG has filed in the BSE website regarding the negative interview on CNBC TV18 two days ago
https://www.bseindia.com/xml-data/corpfiling/AttachLive/37da8ec5-dbb6-4f8f-84b3-a2cfeee3caff.pdf

[nitin_asce]

Excellent clarification. It clears all naysayers doubts.

Extremely happy with BCG and faith in Mr Reddy is getting stronger and stronger.

[ramganesh1982]

Hi all

What a clear detailed response in written .. awesome bcg .. way to go .. very unfortunate skr knows only a polite way to respond .. should have given a sharp response to such bunch of fools

Regards
Ram

[JackSparrow13]

I have rarely seen such a detailed dignified response post a hit job.
I just wanted to highlight a part of note in section “Rationale for dividend payout”.
“We are a company that has grown through acquisitions, as a result that our stand-alone parent company is relatively small, and was more in the nature of a parent company ( this is changing now, with the beefing up of standalone operations at the parent level). Our standalone revenue is at Rs 365 crore as against consolidated revenue of Rs 2855 crore, in FY 21 . Over time, we intend to increase our dividend payout, as the standalone parent starts getting to a higher size and scale.”
So, Mediamint will be consolidated in standalone operations ?

[kiranj]

Excellent clarity from the management to all those people who do not understand BCG’s business.Brightcom in CNBC TV-18 top five picks today. https://twitter.com/CNBCTV18News/status/1494510423445442560?s=20&t=hMxVOp7DTrRo0gZ7Fpj_jA

[Brightspot]

Kindly note that the Company has decided to set Wednesday, March 16, 2022, as the Record Date to ascertain the eligibility of shareholders entitled to the issuance of Bonus Shares. The proposed equity bonus will be issued in the ratio of 2:3 (two equity shares for every three equity shares held by the Members), as recommended by the Company”s Board of Directors in its meeting held on January 25, 2022, subject to members” approval. This notice complies with Regulation 42 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. The resolution for Bonus Issue has been sent to all the Members for their approval through the Postal Ballot Notice dated January 25, 2022.

[NIRAJ1]

ONE person has raisedquestation of AUDTOR IN MONEYCONTROL.COM
I have digged AFFLE’S AUDITORS REOR OF MAY 20 and given answer to him.
Go to affle india site. download AUDITOR REPORTS OF MAY 30,2020. AUDITOR . GO TO PAGE NO 15 AND 2ND NOTES OF AUDITOR S.R. BATIBO. He mentioned that for consolidate result , we have not audited figure but accepted the figures given by managemnt and audited by other indendent auditorfor foriegn subsidies.

SO, PRACTICE of AUDIT is same as AFFLE INDIA LTD. Now will you call AFFLE INDIA to show auditor certificate ? SEBI has given permission to small cap for this matter. ONCE BCG declared herself large cap it will change its prectice.

Answer of dear friend is
Dear bagyodaya ji, For quarterly audit ( Statuary or Local auditor ) is not expected , just a limited review by statuary auditor and local auditor ( other auditor ) is enough . Now the topic in discussion is annual results or annual report. As you posted this message to me, I thought I can share with you . Ar 21 , page 117. Other Matter We did not audit the financial statements and other financial information, in respect of 6 subsidiaries, whose Ind AS financial statements include total assets of INR 5,338.46 Mn as at March 31, 2021, and total revenues of INR 2,701.79 Mn and net cash inflows of INR Mn for the year ended on that date. These Ind AS financial statement and other financial information have been audited by other auditors, which financial statements, other financial information and auditor s reports have been furnished to us by the management. g standards applicable in their respective countries. The Company s manThese subsidiaries are located outside India whose financial statements and other financial information have been prepared in accordance with accounting principles generally accepted in their respective countries and which have been audited by other auditors under generally accepted auditinagement has converted the financial statements of such subsidiaries located outside India from accounting principles generally accepted in their respective countries to accounting principles generally accepted in India. We have audited these conversion adjustments made by the Company s management. Our opinion in so far as it relates to the balances and affairs of such subsidiaries located outside India is based on the report of other auditors and the conversion adjustments prepared by the management of the Company and audited by us.

Coming to brightcom other matter, statuary auditor is not able to form a opinion of audit as he did not receive the auditor reports from other auditors .This is the point . Hope this clarifies . Coming to if you ask audit reports of affle, yes if consolidated auditor make any such comments . We are putting money , deserves to know , since it is a listed company .

Answer is this —
I agree of some part that we should have some information about consolidated audit figure. But this is not Practice by IAS as shown in AFFLE INDIA. ONly figure are given by managmnt to stationary auditors and he trusted it and built opinion on it.
In case OF BCG, Managemnt has given figure to Indain audItor for preparing reports. He ued differant langauage for it. But i want to say indain auditor cannot do foriegn subsided’s audit. He has to relie on foriengn auditor of repective country. I think this will calrify this matter.
As such you put message of accptance that is great.
I

[JackSparrow13]

Just a random thought.
One of the best things, existing investors, can have a lot of doubters of the company. Their desperation to prove the company wrong
1. Forces the company clean up past sins (if committed)
2. Clarify on doubts on the company
3. Be careful of committing frauds in future.
Perhaps its good for us in long term, that so many are doubting Brightcom, especially post rally from last year.
Cheers.

[whyShares]

To quote from an article appeared on Economic Times. It says the Big Bull Junjunwala has invested in Brightcom….

Quote:

“…Jhunjhunwala stocks Delta Corp and Brightcom Group are not tracked much by analysts. Delta Corp reported a profit of Rs 71.29 crore in the December quarter compared with a modest Rs 1.04 crore profit in the year-ago quarter. Its sales rose 104.61 per cent YoY for the quarter to Rs 247.22 crore. Meanwhile, Brightcom reported 168 per cent jump in bottom line and 130.07 per cent rise in top line for the quarter…..”

https://economictimes.indiatimes.com/markets/stocks/news/irctc-affle-among-6-cos-whose-sales-profit-doubled-in-q3-should-you-invest/articleshow/89714975.cms

[whyShares]

To read the full article in ET Prime about Big Bull Junjunwala invested in Brightcom, you need a paid subscription to ET Prime which I have. But you can see a (pirated?) full article on

IRCTC, Affle among 6 cos whose sales & profit doubled in Q3. Should you invest?

[myainvest]

What are they doing with ESOPs ?

[explorer]

I think it is the right time to use the fund reserved for ESOP. Though the quantity it could buy could be less but it will increase the confidence level of retail investors. This fall has driven away a large number of retail investors. The company must remember the share price is still supported by retail investors.

[vgsatwork]

Despite the bounce back in broader market today, BCG stock continues to be under pressure. Guess market is awaiting to see the voting results for bonus issue before any decisive up move. Given that the share has fallen by almost 30% from the time of Q3 results announcement and there is a 40% impending correction due to bonus price adjustment based on the closing price of 14th March, One may have to wait patiently in this counter or take a break from watching the market/stock price for about a month or so. Just remember that the business fundamentals are very good and no other event can over shadow this in medium to long term and BCG would be valued as it’s peers in US market. Just stay put…

[Brightspot]

Appears to be like dirty game of operator to pull the price down and slowly accumulate, see sell or buy volume ..there is no need of selling now after so many good news .. operator want to pull the price as low as possible and buy in bulk someday..stay out

[whyShares]

Webinar/ICFAI Seminar dated 25 Feb 2022 where Brightcom presents- View the World with a Digital Tilt_The Brightcom Way

[whyShares]

Read some of the high tech revealing articles/publications of Mr. Suresh Reddy
https://www.thehansindia.com/suresh-reddy

[kiran]

Sir,

It is quite simple that price is jumping down daya by day.one simple step to buy ESOP from market or small quality buy by promoter or promoter group could ensure confidence in the minds of investors..

Regards

[whyShares]

Brightcom compared with Trade Desk Inc., the world’s largest AdTech Company.

This video was posted almost 5 months ago, but saw it only today, even though I always scan YouTube for BCG videos. May be there are others like me who have not seen this old video and it is posted for their benefit.

[Author]

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