Looking at the balance sheet over ten years

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  • #931
    108BULLGURU
    Spectator
    Topic Author

    @ BCG HOPES & M4 MAX1979.
    Interesting .
    Agree with u both.

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    #932
    Bitran

    @BCG hopes, OMS owns both brightcom (SSP ) and Bold-win (DSP). This is my understanding. Ofcourse OMS is a subsidiary of BCG.

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    #934
    Shoumik

    Good evening friends .

    The value unlocking will happen here from multiple sources which would unleash itself at great speed and help to attain the price at which it deserves to be traded.
    The first source would come from the realization by the market that this is not a shell company which all were made to believe despite the company making huge profit year on year for the last so many years. The value is rs 63 and reserves are 3000 crores. And the company is a debt free company. So the first factor is unlocking of the value built by the company year on year for the past so many years to the current date.

    The second source of value unlocking would be the series of positive messages which will start very very shortly . First coming within 15 to 20 days and followup positive news flow will all come within a duration of next 3 to 6 months which will accelerate the pace of value unlocking.
    Third source of value unlocking will come from lycos Inc which will be retained by Bcg and its business performance will be added to the current business.
    The fourth source of value unlocking of current business will come from actual figures which are going to come to fore with the Audit being conducted from the start of this financial year for all the subsidiaries put together under one consolidated balance sheet and that too for the whole year. These figures which are going to be reported for the whole year for the subsidiaries put together will have a deadly impact through confidence gained on numbers by the whole market and very high net profit which the company is going to report for the year end. These profit figures till now have been under reported and parked in the depreciation , investments and receivables. The EPS this year will atleast be 30 % higher than what has been reported last year.
    The fifth source of value unlocking will happen due to the policy of distribution dividend policy which says that the company will distribute atleast ,I repeat atleast 15% of the free cash flow . The free cash flow which I have estimated and calculated will atleast be rs 480 crores and 15% comes out to Rs 1.50 per share. The profit figure is estimated for the current financial is about rs 600 crores .

    The above 5 sources of value unlocking is only for the present value of business. These 5 sources will pull the stock price based on its present performance.

    But Price of any stock is not dependent on only the present value. The current price of a stock is a sum total of current value + Future value of the business factoring in the workable allowances.

    Now we move on to the sources of value unlocking which will happen for the future developments which will happen and the incremental proceeds which the business will enjoy in future discounted to the present day.

    The sixth source of value unlocking which is shortly going to be added to the current price is that BCG has invested heavily for the last few years in research and development activities and its R & D funding has been matching with the industry leaders. Like for example the company has invested rs 586 crores in the last two years alone in R & D activities in AI and ML, in countries like Israel and United States and product line will flow in near future generating additional exponential growth in revenues for the company. You may kindly note Affle as per it latest balance sheet has not spent a single Rupee on R&D activity. They have no growth plan through R&D activities but our humble sweet child actually ,Arnold Swchzeneger disguised as little baby has ambition to make it very big.

    The seventh source of future value unlocking which is shortly going the be factored in the present price is event of US Listing of the business which will happen when the consolidated balance sheet will come out this year that to signed by the Big Four Auditor which the world world trust. Our ceo though IIT graduate and a indian by birth is actually a US based NRI and has been living a dual citizen life for very many years. He has lot of clout and a big network with the smart tech guys and onboarded a large talented workforce and wants to experience true Capitalism and the economic might of the US. He has set the ball rolling with appointment of a big four auditor. This process of going for a US listing will add further future value to the current stock price. Affle india is trading at a market cap of 4150 with just 70 crores of cash flow and a pe of 85 at the moment . In US, Tradedesk is trading today at a pe of 115 . Talking about BCG – Tradedesk , tradedesk has a debt of rs 1320 crores while BCG is debt free. The leveraged cash flow of tradedesk is rs 543 crores and a mcap of rs 75000 crores as on date, while our little boy with with a unleveraged free cash flow of rs 480 crores for the current year and is at a mcap of only rs 187 crores as on date. Further Tradedesk is trading at a price to book ratio of 19.46 and Affle India is trading at a price to book ratio of 21.33. If we use these to figure to find out the price which BCG should trade is rs 19.46× 63= rs 1225 and 21.33× 63= rs 1343.
    If we compare the three on price to sales ratio which is 17.21 for TED and 14.09 for Affle and use these two for finding price at which BCG needs to trade we get its price of rs 1095 using TED number and rs 907. So now you get the idea from these prices at what price BCG needs to trade at.

    This is all about value unlocking which BCG will be experiencing and the process has just about started.

    In my morning post today i had shed light on the Quality of Business and the above is for value unlocking and for the Quantification of Quality of business.

    Some more aspect on quantification of quality is as below

    The operating profit margin of BCG is higher than the operating margins of both TED and Affle.

    Much is talked about the dividend of BCG . For everybody’s information Tradedesk since its inception from the year 2009 has not paid a single dollar let alone dollar not paid a single cent as dividend. Yes never paid dividend while our little boy has on 6 years paid it and recently declared its dividend distribution policy to give yearly dividend.

    The compounded annual Sales growth for the last 10 years has been for our little boy is 24.24%.

    The compounded profit growth for last 10 years for our little bot has been 32.31%.

    And finally the Return on Equity ROE for the last 10 years for our little boy has been averaging 18.78% and this year os expected to cross 24%.

    Final point all these years the company has been working silently and building on its business , invested in R & D for future growth , closed all its loans, built its reserves to rs 3000 crores , expanded in 22 countries of the world , taking on its competitors world over that ti with highest margins are all a testimony of the Quality of the Business and the Quality of Management.

    Happy investing in this Diamond which is truly World class.

    All of us indians will be proud of this Little Boy in times to come and it’s time has just started.

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    #938
    Raj

    Hats off shoumik. Wonderful insights. Please keep sharing your views for the sake of Bcg investors.

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    #941
    Bitran

    @Shoumik, Well, it is an exciting read. Though I was/am very optimistic, never thought like this. It explains why the mc forum is under control by vested interests. Keep sharing your thoughts.

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    #950
    Faster 2b Fury

    Shoumik thankyou for giving us clarity through your each and every post. All investors have been enriched reading them. I think if SRK goes through your post he himself will say ‘ Way to go ‘ and undertake and unfold the value unlocking potential which benefits all of the stake holders.

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    #952
    108BULLGURU
    Spectator
    Topic Author

    I hope SKR remembers that he is the one who is going to benefit the most.
    All this complex web of companies and cross enteries or whatever U call it got to be clearly broght into the foldof BRIGHTCOM company to TRULY REFLECT the worth in EVERY RESPECT. Sooner the better for every one.
    There is no other way out any more ,byt the look of it……….
    and there will be no need to if at all Daum will also be out of the way.
    wink wink. Execution execution execution on time.
    delivery delivery delivery on time.
    Is the key word for him.
    No more fooling around for years and unfulfilled promises.

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    #953
    sateanna
    Registered Boarder

    Well said BG. This momentum needs to carried forward.. aggressive steps to clear the old issues within limited time, even though it may cost more , but hugely beneficial in the long run. At least market will know the intent of the Promoter and come forward to Invest in BCG. Need to focus on the huge business opportunities in the future and not keep firefighting on the old issues.

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    #956
    108BULLGURU
    Spectator
    Topic Author

    @sateanna.
    Thanks dear.
    Time and energy very precious. 4-45 years already lost due to LGS global saga and its trail of financial disaster and then Daum and Lycos.
    So time to focus on the right things 100% and deliver for the sake of every one. Mere words wont do.

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    #976
    sobha
    Registered Boarder

    Shoumikji, Your evaluation is wonderful. Your knowledge on the field is astonishing. Thank you… Write more..

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    #978
    Saach
    Registered Boarder

    I must congratulate all members for the great and systematical study of 10 years Balance sheet of dear Shoumick. Each and every point is explained in professional manner; Hats off for his efforts and definitely appreciable work. Regards.

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