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    Registered Boarder

    It’s getting tiresome playing defence incessantly.
    In absolute terms, an analysis like the one discussed above can be believable by investors not familiar with BCG or the unique nature of the digital advertising business , and its bias is visible only to the ones who have closely followed all developments in recent years.
    A strong point by point rebuttal is required, else the perception being created is resulting in continuing destruction of shareholder value and reputation.
    Millions would have read the ET article, but very few the positive comments on this forum.
    Proactive communication is the need of the hour Mr Reddy, irrespective of the current challenges being faced by you and the company.

    Registered Boarder

    Published on May 18 2022
    Below is the copy of text from the article. you can read the article in the link also directly.

    “Is Brightcom Group Limited’s (NSE:BCG) Shareholder Ownership Skewed Towards Insiders?”
    BySimply Wall St

    The big shareholder groups in Brightcom Group Limited (NSE:BCG) have power over the company. Large companies usually have institutions as shareholders, and we usually see insiders owning shares in smaller companies. Warren Buffett said that he likes “a business with enduring competitive advantages that is run by able and owner-oriented people.” So it’s nice to see some insider ownership, because it may suggest that management is owner-oriented.

    Brightcom Group has a market capitalization of ₹128b, so we would expect some institutional investors to have noticed the stock. Taking a look at our data on the ownership groups (below), it seems that institutions are noticeable on the share registry. We can zoom in on the different ownership groups, to learn more about Brightcom Group.

    View our latest analysis for Brightcom Group

    NSEI:BCG Ownership Breakdown May 18th 2022
    What Does The Institutional Ownership Tell Us About Brightcom Group?

    Institutions typically measure themselves against a benchmark when reporting to their own investors, so they often become more enthusiastic about a stock once it’s included in a major index. We would expect most companies to have some institutions on the register, especially if they are growing.

    We can see that Brightcom Group does have institutional investors; and they hold a good portion of the company’s stock. This suggests some credibility amongst professional investors. But we can’t rely on that fact alone since institutions make bad investments sometimes, just like everyone does. If multiple institutions change their view on a stock at the same time, you could see the share price drop fast. It’s therefore worth looking at Brightcom Group’s earnings history below. Of course, the future is what really matters.

    NSEI:BCG Earnings and Revenue Growth May 18th 2022
    Hedge funds don’t have many shares in Brightcom Group. Looking at our data, we can see that the largest shareholder is Sarita Commosales Llp with 5.2% of shares outstanding. For context, the second largest shareholder holds about 5.2% of the shares outstanding, followed by an ownership of 4.1% by the third-largest shareholder. Furthermore, CEO Muthukuru Suresh Reddy is the owner of 0.5% of the company’s shares.

    After doing some more digging, we found that the top 25 have the combined ownership of 50% in the company, suggesting that no single shareholder has significant control over the company.

    While studying institutional ownership for a company can add value to your research, it is also a good practice to research analyst recommendations to get a deeper understand of a stock’s expected performance. As far as we can tell there isn’t analyst coverage of the company, so it is probably flying under the radar.

    Insider Ownership Of Brightcom Group

    The definition of an insider can differ slightly between different countries, but members of the board of directors always count. The company management answer to the board and the latter should represent the interests of shareholders. Notably, sometimes top-level managers are on the board themselves.

    Most consider insider ownership a positive because it can indicate the board is well aligned with other shareholders. However, on some occasions too much power is concentrated within this group.

    Our most recent data indicates that insiders own a reasonable proportion of Brightcom Group Limited. It has a market capitalization of just ₹128b, and insiders have ₹17b worth of shares in their own names. That’s quite significant. It is good to see this level of investment. You can check here to see if those insiders have been buying recently.

    General Public Ownership

    The general public, who are usually individual investors, hold a 47% stake in Brightcom Group. This size of ownership, while considerable, may not be enough to change company policy if the decision is not in sync with other large shareholders.

    Private Company Ownership

    We can see that Private Companies own 30%, of the shares on issue. It’s hard to draw any conclusions from this fact alone, so its worth looking into who owns those private companies. Sometimes insiders or other related parties have an interest in shares in a public company through a separate private company.

    Public Company Ownership

    Public companies currently own 4.1% of Brightcom Group stock. It’s hard to say for sure but this suggests they have entwined business interests. This might be a strategic stake, so it’s worth watching this space for changes in ownership.

    Next Steps:

    It’s always worth thinking about the different groups who own shares in a company. But to understand Brightcom Group better, we need to consider many other factors. For example, we’ve discovered 2 warning signs for Brightcom Group (1 can’t be ignored!) that you should be aware of before investing here.

    Of course this may not be the best stock to buy. Therefore, you may wish to see our free collection of interesting prospects boasting favorable financials.

    NB: Figures in this article are calculated using data from the last twelve months, which refer to the 12-month period ending on the last date of the month the financial statement is dated. This may not be consistent with full year annual report figures.

    Registered Boarder

    Interesting to note a competitor of BCG an affle investor trying to run down the company….let’s not forget the info yet to be confirmed that the big bull is also buying into this….all in all possible involvement of relevant people including management may be involved in cornering a big chunk, post listing of bonus shares….
    On the brighter side, I am holding a big chunk at less than 15 rupees and these dramas will be cleared by this month end. Kindly decide on buy or sell call by yourself.
    Best wishes to all long termers

    Registered Boarder
    The above link contains managemnet’s reply on trade receivables.
    Slide 7 says
    The target FCF for FY22 remains at Rs 250 cr, and as stated in earlier communication, is slated to reach Rs. 500 cr by June quarter, 2022. Improving Free Cash generation is a key financial target for management.

    Remaining Controversy about Promoter selling share
    If you need capital to grow, you often sell shares. Often promoter holding in start ups, founder led companies (1st generation) are diluted to raise shares. Even Shark Tank is just that. Let my put a reverse logic, whats the need for a promoter to run the company day-to-day, when he holds a minority shareholding. Answer – It must be passion and devotion to the company. The ultimate solution of course is a stronger promoter share.

    I personally dont believe management should clarify to every Tom, Dick Harry’s article, who runs 20 ratios, and eventually writes about 5 financial metrics where picture seems most disturbing (over extremely long time periods). The name Brightcom gives cheap publicity, especially if you write a article against it.

    What should management do
    1. Focus wholeheartedly on business. Not lose focus on every new noise maker.
    2. Maintain steady dividend, and steadily imporove over years. Atleast the the “idiots” like us, who are refusing to accept “market wisdom” should be rewarded little by little.
    I draw attention to management commentary about dividend (1st link).
    “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. Cash generation Divergence between holding company-type parent companies and operating subsidiaries, is routinely observed worldwide, in such normal corporate structures, since most/ majority, of the business is generated at the subsidiary level and not at the parent level, for such companies”
    3. Over next 5-10 years, sort out shareholding issue.

    I have never seen such a concentrated amount of dirt being thrown on a company. Makes me more bullish on Brightcom. But portfolio allocation is vital. Have your limit on maximum you will want to risk on a particular stock, and stick to it. We are not employees of Brightcom…

    Registered Boarder

    The article in ET prime is written by Varsha Santosh. Varsha WHO? One can search Linkedin. I wouldnt glorify an “opinion” and open ended article from a nobody – ” stellar returns or just a mirage?”. She is questioning our company. And many like her are. So, the real question for me is – who really posed the assignment – ” How can you save some stupid retailers from BCG scam? Remember Sucheta Dalal? Good luck!” Mounting debt? Serously? Who proof read and gave a go for the article to be published.
    One just needs to compare TTD, APPS with BCG. The business constraints are similar if not the same.
    On top, our company also likes to inflict injuries to itself.
    I have just one thing to say to SKR if I ever meet him (maybe I will soon) – You have a once in a lifetime opportunity. Dont blow it up with procedural/communication lapses. 28th May D-day! Time to shine.

    Registered Boarder

    Brighcom group Investor Conference Call
    The company intends to conduct an Investor conference call on Wednesday, June 01, 2022, at
    04:30 p.m. (IST).
    This call will happen after the results announcement on May 28, 2022. The primary objective is
    to present the results and the company’s future plans to the shareholder community

    Registered Boarder

    Good volumes traded today, 5 large deals of more than 2,00,000 shares (2 on bse, 3 on nse).

    One week to go to June 1st, for some info on the SHP.

    Registered Boarder

    Dear all, bonus shares trading approval has come…trading from 30th Monday…now mmb bonus boys will take up dividend or some other stupid things…good news is FA also looks like a done deal, as company is declaring audited results. best wishes

    Registered Boarder

    Bonus shares approved now I feel the shp will be released today with the mystery of missing promoter shares unravelling .. I feel second bonus was given for this only .. he took cumbonus shares from preferential allotted via LLP and gave thm his bonus stripped shares after record date… so he increased his holdings without spending any money or selling shares… the new shp may show promoters shares increased to 25 to 30% I think …its perfectly legal way though many would object morality.. bu ultimately gud for our company cheers

    Registered Boarder

    Perticularly in twitter, so called analysts, every tom n dick comments on company based on price,
    They purely play for 20% returns.
    Im sure they will never be part of multibagger stocks not only BCG, any other companies..

    Personal opinion, BCG Q4 results are fentastic,very good dividend .30 Paisa, I understand CG they should improve, this is there from very long time,
    hope they will work n resolve this year n move on 😀

    Registered Boarder

    Brightcom Mar’22 Results

    1. Standalone Results – Sales (Rs. 94 Cr Mar’22 vs Rs. 84 Cr Mar’21), Net Profit (Rs. 0.14 Cr Mar’22 vs Rs. 8 Cr Mar’21)
    2. Consolidated Results – Sales (Rs. 1240 Cr Mar’22 vs Rs. 699 Cr Mar’21), Net Profit (Rs. 223 Cr Mar’22 vs Rs. 140 Cr Mar’21)
    Full Year Ended – Sales (Rs. 5020 Cr FY’22 vs Rs. 2856 Cr FY’21), Net Profit (Rs. 912 Crs Mar’22 vs Rs. 483 Cr FY’21)
    3. Vuchi Media Private Limited (Mediamint) Acquisition is yet to be completed, hence company did not consider its financials in Mar’22 Consolidated Results.
    4.Brightcom has recommended a final dividend of Rs. 0.30 per equity share, subject to approval in their ensuing Annual General Meeting.
    5. Management commentary on Financial Results
    “The company reported a strong year, with Consolidated revenues of Rs. 5019
    crores and PAT of Rs. 912.2 crores for FY22. Fourth quarter revenues were Rs.
    1240 crores and PAT of Rs. 223 crores.
    Consolidated revenues rising 75.8% YOY and PAT rising 88.86% YOY. Notably,
    EBITDA also rose to 69.78% YOY.
    Company’s Return on Equity (ROE), on an annualized basis has reached 17.23 %
    approximately. We are focussed on improving this key ratio substantially.
    We achieved an operating Free Cashflow of Rs 287 crores for the year FY22. We
    are looking to meet the 500 crores FCF mark by the end of the June quarter.
    The Board has decided to payout a significant amount of Rs.60.54 crores as
    dividend, to reward its shareholders. This represents a dividend payout ratio of
    around 7%, which compares extremely favorably with global tech companies,
    such as Nvidia ( dividend payout ratio of around 4.5%) to Apple, which has a
    dividend payout ratio of around 14%.*
    • Improving Free Cash generation is a critical financial target for management.”
    6.Auditing standard is same as before. Consolidating results of overseas subsidiaries. No Auditor Certificate of Stand Alone Foreign Entity included in Results.
    7.As per Auditor
    Standalone Result Audit (Emphasis of Matter Paragraph: 3)
    SEBI ordered Forensic Audit vide Ref No – SEBI/HO/ CFID/ CFID_4/P/OW/
    2021 /24343/1 dated 16/09/2021 as per the provisions and Regulation 5 of SEBI
    (PFUTP) Regulations 2003 read with section 11C of SEBI Act, 1992 and Deloitte
    Touche Tohmatsu India LLP has been appointed as forensic auditor w.rx.t the
    financial statements for the Financial years FY 2014-15 to FY 2019-20. The said
    Forensic Audit is under progress and the final outcome of the investigation is yet
    to come by the time of our Certification.
    Consolidated Result Audit (Emphasis of Matter Paragraph: 4)
    The subsidiary company M/s. Ybrant Media Acquisition Inc has acquired M/s.
    Lycos Inc.,
    M/s. Ybrant Media Acquisition Inc has dispute in respect of consideration of USD
    16 Million for acquisition of M/s. Lycos Inc, to Daum Global Holdings
    Corporation and the district court of New York has given judgment to handover
    back 56 % equity in M/s. Lycos Inc to M/s. Daum Global Holdings Corporation
    and the concern matter is pending as on date.
    8. Additional Matters from Management Discussion
    a. The main drivers of revenue this year were:
    • Overall growth of the digital marketing spend across the globe
    • Agencies saw 54% year-over-year growth from 2020 to 2021. Moreover, agencies
    project a whopping 68% average growth in 2022 as well.
    • Improved eCPMs continue to contribute to increasing the budgets.
    • Client acquisition and retention were better in 2021 than in 2020.
    b. We signed a letter of Intent to acquire Digital Audio company to improve our Audio advertising footprint in the US. The Due Diligence of the same on finances and Legal side just got completed. Legal agreement work is in progress.
    We predict strong growth for the foreseeable future.
    • The top two services for digital marketing companies are:
    • 34% Social media marketing
    • 29% Full service digital
    • We feel confident, we have positioned ourselves well in the market and established our value to clients
    Top challenges facing agencies in 2022 all focus on driving growth.
    • 82% client acquisition
    • 81% hiring
    • 80% client retention

    Registered Boarder

    Brightcom Mar’22 Results
    My Free Opinion
    What I liked –
    1. Dividend Announcement – As I had posted in May 20, 2022, views of management on dividend issue, happy to see dividend improve. One of the the “old but gold” investing hearsay is a strong dividend payout, often makes helps creating a strong base for stock price.
    2. Liked comparison with Apple in dividend announcement. A small hope is rising that as company grows, dividend payout would increase.
    3.The management achieved their FCF commitment of Rs. 250 CR for FY’22, and has reiterated its goal of Rs. 500 cr FCF by June quarter.
    4.Sounding almost opposite to above, I really liked company’s extremely vague future outlook (meaning devoid of hard financial numbers). We now live in a turbulent inflationary world. Europe is badly hit due to Ukraine war, messing up prices of everything. The last thing a logical company would want is an ambitious sounding target.
    5.Letter of Intent to buy a Digital Audio Company. I think this needs a bit of celebration too.

    What I did not like/understand
    1. Why Mediamint’s result could not be consolidated?
    2.If dividend could not be now and approval taken later at AGM. Brightcom has had delayed AGMs, and this “delayed” dividend payment might again create a controversy.
    3. Why FA is taking so long (of course Brightcom not to blame for this).
    4.Auditing Issue, and Simplification of Subsidiaries – Less said, the better

    I think this year, the management should keep their heads down, focus hard on business, not get involved in avoidable issues (like delayed/botched up bonus share listings), and try to improve their shareholding.

    Looking forward to a stormy concall over promoter share holding fiasco 😉 If they dont explain it clearly in introductory remarks, will be happy to see them get a bit of plain talk… Cheers.

    Registered Boarder

    Yearly results are very good as it matched the guidance given by management but quarterly results missed the guidance (net profit not total comprehensive income).

    I guess like other ad-tech companies, BCG too faced issues with clients having to deal with supply chain issues, high inflation and the war in Ukraine (war started in Feb so applies to Q4). These things will lead to a cut in ad spend which affects ad-tech companies.

    Rs 0.30 dividend was a big surprise for me as I was expecting dividend to be max 0.10 or 0.15.

    Good to see progress in audio ad acquisition and singing more publishers, ad agencies and advertisers.

    I’ll share my queries for the conference call by EOD.

    Registered Boarder

    Reposting with more accurate figures regarding the outstanding paid up number of shares. Please comment regarding the accuracy of these calculations. Thanks

    Even though the results look extremely good, it should be noted that in 2020-21 there were only about 50.76 crore shares of Rs.2 face value. Now in 2021-22 there are about 201.79 crores shares of Rs.2- outstanding.

    This means that the EPS (Earnings per Share) for year ending March 2022 is only 4.52 compared to 9.51 the year before.

    The market value of a share is measured by its PE ratio (Market price/EPS). The pre-bonus share price high was 205 or so, which means a PE ratio of 205/9.51 = 21.5

    After bonus now the price is about 65 which means a PE ratio of 65/4.52 = 14.38 say 15.

    A PE ratio of 20 is considered a fair value for a company with steady income, thus a fair market price for BCG now is 4.52×20 = 90.40

    It should be noted that Companies like infosys, TCS and other companies in the IT sector has an average PE ratio of 30, in which case, BCG should be at 135.60

    BCG is in Ad Tech sector and the best comparison for the Ad-tech industry is the company ‘Affle’ whose PE ratio is 65. At this PE ratio BCG price will be 293.80

    BCG is improving and every year its EPS and its PE ratio should increase. So look forward to a bright future for BCG.

    Registered Boarder

    hello sir, if someone attend conference call tomorrow , please ask below question

    1. if sebi investigation was only related of impairment of asset only (as told by skr in the clarification), why they are taking more than 6 months in investigation, Deloitte Touche Tohmatsu is so dumb to understand it?
    2. until now they have not appointed CS and CFO, and audit is in progress, who is coordinating it auditor now?
    I dont think share price wont appreciate if those things are clear to investors

    Registered Boarder

    Share price end in LC even after blockbuster result and/ or even after announcement of 30p dividend , SKR need to understand to become global company of repute transparency and good corporate governance very important , otherwise we will be dreaming about brightcom become largecap for ever

    Registered Boarder

    I guess people are selling bonus shares which they recieved yesterday. I don’t understand the concept of selling bonus shares as I don’t know what you’ll get from doing that but that’s what people do when companies issue bonus. Last time also we saw similar thing happen. The stock was under pressure for some time after the bonus shares were credited and then the news of Mr.Sharma investing in BCG took that pressure off.

    This time the total number of shareholders has also increased and the ratio is also more (2 for every 3 but last time 1 for every 4) so the selling pressure is more (as people may sell those 2 extra shares). FA, promoter SHP confusion and pressure on tech companies’ shares are also playing a role.

    (Tanla, Affle also had great quarters but even their shares were under pressure after their results)

    Registered Boarder

    The only two other (positive) differences are the decent free cash flows generated and the domestic and foreign institutions continuing to invest in the company.
    I’m also never clear on the disposal of equity shares received by way of bonus shares by capitalisation of free reserves of a company.
    Whether I hold 3 shares at Rs 100 each or hold 5 shares after a 2:3 bonus at Rs 60 per share, the total value of the holding remains the same. Only the paid up capital increases to the extent of the bonus shares issued.
    And hence the pressure on the management to retain or increase the eps on the enhanced equity.

    Registered Boarder

    Hopefully, the management has had enough fun with Bonus shares, for some time.

    Registered Boarder

    guys sorry for dragging same topic, in the conference main topic would be on FA and appointment of cfo per my knowledge and experience sebi will put on hold FA process for ever if they dont get the required documents and response from CFO, i guess nothing is happening on that front without CFO (forever FA will be in progress)..what was the urgency to send cfo before FA? you can see in the case of suspended companies sebi is not revoking as they have not received required documents even after 7 years..

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