Fundamentals and Business Related Activities

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  • #7826
    Logan
    Registered Boarder

    4>

    Number of clients BCG has is more than 30,000 at least (the number is actually more but because of competitive reasons BCG won’t reveal those numbers). BCG’s clients are Publishers, Advertisers, Ad Agencies, Colocation Centers etc and the business is very complex.

    IT Companies like Infosys’ client number is around 2000-3000, I don’t know the exact number but it won’t be more than that and all the clients do business for long term so the cash flows will be quite stable.

    BCG is an SSP so they always add more publishers and doing that will increase the receivables and affects the cash flow. So getting additional funds is very important to resolve that issue, if the company’s revenue increases then the problems with receivables will reduce, you can see that with Criteo, they don’t have receivable problems like BCG. Mr.Reddy has always said that but people till now haven’t understood.

    (I didn’t compare with The Trade Desk or Affle because both these companies are in their early stages and during that time all companies will have higher growth rates, even BCG had higher growth rates in its early stages).

    3+
    #7827
    Logan
    Registered Boarder

    Coming to dividends, just because Pressman gives them we can’t expect BCG to do the same. Both are not in the same industry, BCG is in Ad tech industry and its totally different from what Pressman does. Google which is an Ad tech company doesn’t pay dividends in spite of having more than $125B in cash (more than Rs.9 lakh crores). Even Criteo, TTD and other tech companies won’t pay dividends. Mr.Reddy at least has announced a dividend distribution policy and if all the issues are resolved, BCG will start paying dividends. We need to have patience.

    Also you have mentioned only about dividend but why have you left out details about revenue and profits of Pressman?

    PRESSMAN ADVERTISING

    2016
    Revenue – Rs.47Cr
    OPM – Rs.6Cr
    Profit – Rs.4Cr
    EPS – Rs.1.73
    Acc.Rec – Rs.7.17Cr
    Acc.pay – Rs.3.07

    2020
    Revenue – Rs.34Cr
    OPM – Rs.8.5Cr
    Profit – Rs.5.3Cr
    EPS – Rs.2.27
    Acc.Rec – Rs.7.72Cr
    Acc.Pay – Rs.2.55Cr

    Pressman’s revenue has decreased more than 30% in 5 years and you think that’s good? Are you okay with getting dividends but revenue decreasing every year? Increase in profits is not much. Why did you only see BCG’s stagnant growth and not see Pressman’s fall in revenue? Don’t you think Pressman should also have increased their revenue? They had Rs.25 crs profit and still they haven’t grown,
    why?

    Pressman’s stock price has fallen more than 65% in the last 5 years in spite of giving dividends so we can conclude dividends aren’t the answer. The main reason BCG has negative sentiment is because people don’t understand the business. If people change and if they really understand the business, they won’t be selling their shares, they should be lucky to be shareholders of a new age tech company.

    4+
    #7828
    Logan
    Registered Boarder

    6>

    I don’t understand why people are always extra critical on BCG and they see only negatives, why don’t they see the positives also?

    Also Mr.Reddy has become a punching bag for many people, their logic is whatever happens, blame the CEO, if share price falls blame Mr.Reddy, if profits don’t increase, blame him, if revenues don’t increase blame him, don’t understand the business, blame him, but they never understand his or the company’s problems.

    I’ll repeat again, yes, the CEO didn’t take quick actions to stop the fall of share price but nowadays he has corrected those mistakes. Let us be patient and give the man some more time. I’m sure it won’t take many years for the company to resolve all the outstanding issues (almost all the issues are resolved).


    @George
    , I don’t have anything against you, I wanted to resolve this confusion about growth and since you talked about it, I replied to you. You mentioned Pressman in your post so I talked about that.

    We have a great platform to ask questions and share our opinions and we should make sure that we always ask the important questions.

    @George
    , You have asked an important question about growth but I expect you to do more research before commenting.

    5+
    #7829
    Logan
    Registered Boarder

    7>

    If I hadn’t mentioned about Criteo then everyone would’ve blamed the CEO without knowing proper details. We shouldn’t do those mistakes, we should always go with facts (or we should always understand the reality).

    Retail investors have this problem where they want answers to everything on spot, they want the issues to go away quickly and always they want binary answers (yes or no) for every questions. Let us not be those investors, let us understand the problems of the company.

    The Admin always says that he wants to make this forum a knowledge hub and let us do that by discussing important things. We should not be typical retail investors.

    Let’s ask Mr.Reddy critical and important questions, you can see him getting excited when we ask a question about business, so let us ask him more about business. The share price will take care of itself if we (retail investors) talk more about business, slowly the market sentiment and perception about the company will change and that will benefit us.

    #7830
    Logan
    Registered Boarder

    8>

    I’ll leave it to the readers to understand BCG’s problems. Till now I have explained about many important things and I don’t have the patience anymore to give lengthy explanations. No matter how much explanations we give, some people won’t change their views and they always come back and repeat the same thing again and again. I have one article left which I will post and after that I’ll reduce my activity on the forum. I’m really tired of answering to each and every baseless allegation and conspiracy theory about the CEO and the company. I’ll always trust the man who built a Rs.2700 cr company from scratch, the man deserves respect and appreciation from us.

    I hope everyone will understand what the reality is and I’m sure they won’t fall prey to fake information or conspiracy theories.

    #7831
    nitin_asce
    Registered Boarder

    @saul Goodman I noted one very interesting thing from your post. BCG payables are just 10% of receivables whereas crite it is around 80-85%. Do you think that bcg used profit from last few years to reduce payables.

    2+
    #7834
    sateanna
    Registered Boarder

    Good point @nitin_asce .. It just goes to show what SKR was telling is true. He mentioned that he had to pay his creditors immediately, whereas he would receive only after 90 days or so…Only thing that worries me is the aging of the receivables. SKR claims that none have gone bad & need not be provisioned for.

    3+
    #7835
    Logan
    Registered Boarder

    @nitin_asce, it’s how the industry works, payables will always be less than receivables because BCG will pay publishers every month and advertisers will pay BCG after 4 months.

    Suppose BCG signs up a new publisher and they agree to buy ad space for a year. The total amount is 1200 and BCG will pay 100 every month for 12 months. Let’s say the advertiser has agreed to pay 1500 for that and they’ll pay 125 every month.

    Since BCG has to pay publisher every month, they’ll start paying from January itself but advertiser will start paying BCG after 4 months i.e from May. So for January they’ll get paid in May and for February they’ll get paid in June and for March in July and so on and finally for December they’ll get paid in April next year.

    So if you check in September, the amount to be paid will be 300 and the amount to be received will be 875. Very big difference right?

    Including taxes if the expenses are 1350 then the profits will be 150 but we have to understand that BCG won’t receive that 150 at once.

    This example is very basic but the real operations will be very complex as it involves many parties.

    Market won’t care about all these things and it cares only about profits and growth. That is where the problem is right now, it doesn’t understand the business and that’s why the share price is low (and also because of other outstanding issues).

    But thanks to investments in jio, market is understanding the benefits of digital sector and it is trying to understand BCG’s strengths also and since BCG is resolving all the outstanding issues, there won’t be anything for the market to blame.

    #7832
    bitran
    Registered Boarder

    @Saul Goodman, Thank you for your detailed articles. Itz enlightening. Just wanted to correct on one point wherein you said BCG is an SSP. I beg to differ on that. Brightcom is a SSP but BCG as a group contains many entities which includes Boldwin which is a DSP and recently they acquired Vixi tv. So connected tv also is part of BCG. Then, I also suspect they also own a list of publishing assets which may be consolidated into a single umbrella. Add Lycos also to the list. We need to get clarity on all these in the next conference call. Feel free to correct me if I got this wrong.

    #7838
    Logan
    Registered Boarder

    @bitran, Thank you for bringing that up.

    There’s lack of clarity on many things so without proper information I won’t write about those.

    I’ll talk about things that I know and since Brightcom is an SSP, I talked about that.

    I always had confusions about Bold-win, literally media, the operations of we-endeavour group, ingress ventures (espot and edgecase), onomagic etc, so I won’t talk much about them.

    All these topics are very interesting and I want to know more about them but the company has not given proper information about those.

    Few days back someone mentioned about one-tag and that was also very interesting, then there’s panega which BCG uses which is also interesting. I have no confusions about VoloMP.

    (Till now BCG has never mentioned about bold-win in their presentations so I didn’t want to speculate on that. They have mentioned about one-tag, compass, panega,VoloMP).

    As you said we should get clarity on all these in the next conference call. The problem is, in the conference call, people always ask the same questions and those are more about Market and less about business. Even if we discuss here, there’ll be other investors who call and ask unwanted questions. Also the company won’t clear our doubts when we send them mails (they won’t reply at all).

    If you know about bold-win, please write topics on that so that we will be familiar with that. It’s very intersting and also important to know about bold-win and other topics.

    2+
    #7839
    lycos.rags.to.riches
    Registered Boarder

    Saul, I would beg to differ on your comment that market is extra critical on BCG, market has always been critical about the companies which are not open to investors. Even blue chip companies like Infosys are made to stand on their toes when market sees something red in their business.

    If BCG management or investor relations has spent only 10% of the effort and time spent by you in making us understand BCG business, things would have been different over the past 10 years. Investor relations cannot be just a mail id on the website.

    We wouldn’t be still discussing on revenues and profits if BCG had just provided details of the below three questions during each acquisition they made.
    How the acquisition is being funded
    what is the expected revenue growth
    what is the business growth

    Market wouldn’t be critical if BCG is more open about new initiatives, every company has competitors but still they give details about the initiatives. This makes the investors feel that the money invested is being put to proper use.

    Market wouldn’t be critical, if BCG was able to find a buyer for Oak shares as promised which i strongly believe is the reason behind the current down-slide in stock value.

    3+
    #7840
    Logicalspeak
    Registered Boarder

    This is what I told, that in last about six years they had abouy 2000 crore net profit reported and increase in recievable is 250 Crores (six years back recievable was about 700 crore and now recievable is 950 crore, therefore increase in recievable is only 250 crore since last about six years).

    Therefore, net hard cash available with the company during last about six years was 2000-250= 1750 crore for there discretionary spending ( this is not on my assumption basis. If some body is claiming that my above post is by simply assuming X,Y,Z….etc, then they should agree to the point claimed by negetive boarders in MMBthat there profit is only book entries and No real cash).

    THIS IF totally reinvested by the company in digital ad tech business, their revenue should have been way higher. But that is apparently not the case here.

    Then what are the other areas where major portion of that money chennelised by the company.That should be clarified by the company, which appear to be there in the form of smoke in the above message. But what revenue is generated from that has not been disclosed by company, if at all any.

    Those revenue and profit if any has not beem disclosed by the company so far. The company should clarify that area in detail. Now due to @Bitran’s message, it seems @Saul had to realise my point .

    4+
    #7842
    bitran
    Registered Boarder

    All, my message was primarily to project how valuable BCG is when we consider the entire group and not only brightcom. Yes, there is lack of clarity on certain fronts but it is very much possible that management wants to test the waters first and want to wait until there is sizable revenue out of it to communicate openly. Additionally, all knows that Oak will be selling and hence they might have thought of not revealing all their trump cards as anyway share price is in penny. Hope management attention come to the investors plight and they will do the needful to improve the market sentiments and share price.

    5+
    #7843
    T9C
    Registered Boarder

    How can a public company hide it’s investments and reveal it later whenever they want? If you see latest clarification sought by nse reg: B-local notification, they asked when was it launched? And BCG replied 3 months back. why did not they inform when they launch it?

    3+
    #7845
    T9C
    Registered Boarder

    We all discuss and decide to ask questions in call about the investments, growth, receivables etc. But they will create a new issue during the results and we all will be shocked with that and forget about above issues and just concentrate on this new issue.
    This is what happening for the last 4-5 years. And they will not reply to any of our questions.
    And in one of their presentation, they mentioned buyers are lined up for Oak shares, but Oak is selling in open market, how can they inform exchanges such false information?

    5+
    #7847
    Logicalspeak
    Registered Boarder

    @ SAUL in his message # 7838,has now admitted that, the following areas have no clarity,which he mentioned in the above message are,

    1. Bold-Win
    2. Literally Media
    3.We-Endeavour group
    4.Ingress Ventures (spot and edge case)
    5. Onomagic etc.

    As such large portion of company’s money is channalised in such ways without clarity of any revrnue or profit, it shoud not end up like promoter create their own private companies by externally using the company and its share holders money.

    It Appears already they have mentioned that we-endavour and edge case are not owned by BCG. But Bcg’s earlier appointed preident as earlier updated by company, Shri pasipati, is now (some one posted here that he is present CEO of edge case which was stated as not owned by BCG (whether this is correct or not is not known). Is he presently working in BCG also. To that also no clarity is there.

    Similarly ‘we-Endeavour’ is also stated by CEO IN ONE CONCALL, as a stock option alternative to the BCG’s Isreal employees/officials.

    But whether any money out of the said 1750 crore belong to company is channelisrd in such areas where conflicts of interests are there, that is, for developing those private companies. This become more serious seeing that company in almost all preveous years writting off the succussive preveous years intangible assets as per company’s published ARs of many preveous years.

    My worry is whether company money is getting syphoned off, in such private company development.

    We need clarity in all these areas.

    Let us not conclude any syphoning off or frauds, but let us compel the company to clarify how and where 1750 Crores of company’s hard cash is deployed.

    5+
    #7848
    T9C
    Registered Boarder

    @logicalspeak,

    Pisipati is not CEO of Edgecase but MD of Trayan.in, this is recently launched.

    Not sure if he is still with BCG.

    1+
    #7849
    Logicalspeak
    Registered Boarder

    Thanks @T9C, for correcting me. I stand corrected in my #7847 to that extend in ur #7848.

    0
    #7851
    Logan
    Registered Boarder

    1>


    @Logicalspeak
    , Now I’m understanding your intentions, you want everyone not to think logically and you want them to make up conspiracy theories just like you.

    You are targeting me because I debunked all your weird theories and somehow you want to turn everyone against me. Why do you want everyone to hate me? What will you achieve doing that? This is so childish.

    If you continue to do this, I may stop writing in this forum and there won’t be anyone to debunk weird theories.

    Don’t mention my name ever again in this forum, if you mention my name then I’ll ask the admin to take actions against you. If you want answers ask others and never ask me. But at the same time don’t make up weird theories. It’s really annoying.

    You have a clever way of manipulating others’ sentiments and it’s so obvious, at first you accuse the company of weird things and later you write good things about it. You don’t want people to think about your true intentions but it’s so obvious to us. All your posts are the same.

    Last time you made up few conspiracy theories about LOC, Consolidation, Buybacks, dividends etc and when I answered all those, you came up with revenue growth and when I answered that also you are coming up with Bold-win, Literally media etc.

    3+
    #7852
    Logan
    Registered Boarder

    2>

    I still don’t understand how BCG could’ve grown their revenues more, now also I want an explanation for your arguments. Give out more facts and then when you are right I’ll change my views, just repeating the same thing again and again won’t make any difference. From the day one I’m asking you to explain but you have never done that.

    If you have proof that the company is siphoning off money then share it with us or better give an official complaint to the authorities, they’ll take action. Nobody has time or energy to think about your “guesses” and weird theories.

    The company can lie to us with profit & loss statement but they can’t lie to us with cash flows.
    Why Criteo also has not improved its revenue then? There are various factors for that which we both don’t know about.

    Regarding comments on MMB and other platforms, people who are commenting are retail investors just like you and me and they don’t know anything about the business, their job is only to comment and they want the company to fix all the problems at once and they want quick solutions for complex problems. That doesn’t happen in business, it’s not easy to run a business. Taking their opinions is waste of your time, you won’t get anything from it. If they are genuine then no problem but they keep repeating the same thing again and again even after addressing those issues (just like you).

    2+
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