November 21, 2021 at 1:52 am #12884jay69Registered Boarder
Key takeaways from investors concall held by BCG on 20th November 2021
1. Reasons for growth in business – More & more people spending a lot of time online & on digital platforms, previous done 30 billion impression per month now doing 70 billion impressions per month, compared to the leaders BCG is rightly positioned to increase revenues in the future, the guidance given by the company doesn’t change as the outlook is very strong.
2. The management of the company is extremely “tunnel focused” on return on equity (ROE) which is currently at 16.45 & its an extremely important ratio going forward in order to increase shareholder value.
3.The promoters have not sold a single share of the company their stakes have reduced due to the recent equity dilutions, the company working on bringing in more FIIs, big investors meeting & talking to analysts of very large bankers to bring in big FIIs.
4. Audit of accounts happens once in a year across all the subsidiaries of BCG across the world by the auditor of that country the review is done in India by the Indian auditor, company is very minutely looking at how to improve accounting policies, improve governance & transparency.
5. Consolidated Tax rate is 27% (globally), OMS (Israel) brings 40% business.
6. More emphasis on “FCF & ROE” from hereon minimum FCF of ₹ 250 crores by March 2022 & minimum of additional flow of cash of ₹ 250 crores in the June 2022 quarter the FCF is based on current business only.
7. Regarding Indian acquisition the due diligence is complete (both legal & financial) the acquired company is doing extremely well, now all the legal papers, share purchase agreement (SPA) will be done as its a 2 stage process first is signing & then closing the deal in about 2 months in order to ensure a smooth transition.
8. The Company is very aggressive in relationship building the company reached a total of 200 Ad agencies & in fact crossed that figure.
9. The Adtech business has a very strong outlook across the world & it may remain strong for the next several years, tailwinds for the adtech sector is very strong & this growth is not a temporary blip as there is a complete change in the consumer behavior.
10. B-LOCAL is doing extremely well in USA.
11. Google MCM partnership business will start flowing in the coming quarters so more business & traffic will flow in the future quarters.
12. BCG is more of a digital marketing & internet based company with great platforms with a global workforce more people will be hired in times to come.
13. Company is very strong on the SSP (Sell Side Platform) & the company’s core strength globally is on the demand side where it works with Ad agencies & direct advertisers the company tries to grow both together as it aspires to be a full solutions company.
14. There are 3 basic pricing models Cost Per Impression (CPM), Cost Per Click (CPC) & Cost Per Acquisition (CPA). CPM (Compared to Benz Car) CPC (Compared to Toyota Car) & CPA (Compared to Maruti Car) the company uses all the 3 models according to the market conditions.
15. Focus on tech & people so always working on bigger, better technology including tools in AI & ML which will take the adtech solutions of the company to a completely different orbit as lots of cool stuff is coming up going forward.
16. Tools like Brightcom, Compass have been upgraded which has significantly improved operating efficiency, another big driver is filtering technology removing the BOT based traffic due to improved technologies, every technology company has to spend a lot of money on product development to stay ahead of the curve, beat the curve & continue to grow.
17. Business has seen a huge surge in the past 1 year so the AdAuth figures are not a proper reflection the more important thing to watch is Ad impressions.
18. Audio Ads is the new kid on the block the company is looking at several digital ads companies in the USA out of which the one suits best will be acquired & when LOI is signed it will be informed to the markets.
19. For inorganic growth the company doesn’t want to dilute too much if required the company may resort to short-term bridge loans if the acquisitions are big & it will paid by cash generated by the company.
20. In the next stage the company may look for dilution at the subsidiary level (all subsidiaries are 100% owned by the parent company), the company has various options of foreign listing of the consolidated subsidiary (company getting lots of inbound calls regarding it) but the company is not in a hurry as it will first efficiency parameters like ROE etc.
21.People wise the company is actively looking for senior leadership to take the company to the next level, two strong leaders in Mr.Peshwa Acharya (Business Strategy) & Mr.Satish Cheeti (For inorganic & new areas like digital ads) the company is also looking globally to bring more new leaders & the company also already has a lot of competent people but needs more people to go to the next level.
22. Lycos issue is settled only the paperwork is pending which will be done maximum within the next 3 months, the company has big plans for Lycos which will be unveiled later.
23. The AGM announcement may come out within a week or two.November 21, 2021 at 12:13 pm #12886jay69Registered BoarderTopic AuthorNovember 21, 2021 at 1:04 pm #12888nitin_asceRegistered Boarder
I have a query on yesterday’s concall, the query is on Google MCM partnership. Mr reddy confirmed it will have effect next quarter onwards. I am bit confused if it’s effect will come in q3 results or it will come in q4 results.
The other question is how big is this opportunity from current business perspective. Say is this partnership can increase the current ad tech business by 50% 20% or is it miniscule. Can any senior boarder help in understanding the size of Google MCM partnership opportunity.as per concall the numbers does not include effect of MCM partnership in current forecast of q3 snd q4.
I personally expect it will take few quarters to fully realize benefits of this opportunity.1+
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