[108BULLGURU]

Did any one ask any questions about these HUGE  over due receivables and their details?

Are we going to recover them or they end up as write offs sinking the company?

Pls respond in detail.This is the biggest question mark i have still about BCG.

Thanks  in advance for your detailed replies

[Faster 2b Fury]

Good morning. The overdue recievables are nothing but the ploy of the management to park portion of their profits only to be realized when the situation is ideal for them.       Shoumik’s posts and the you tube videos of nitin bhatia which he has mentioned in his post have really opened my eyes and given a great new perspective and also given me the confidence to buy huge and build a future for my family.

[108BULLGURU]

but the y wrote off 25 crore for standalone in last qrtr. So if that happens to other segments it wipes 500 crores of the balance sheet

[Shoumik]

These small receivables loss is termed as Business Risk and every company over its lifetime has to face such minimal risk. This 25 crore write offs gives us silver lining that the rest of receivables are safe and parked with the blue chip companies only to be realised at a later date.

[108BULLGURU]

That 25 crore was only from operations in India. There are 20 other  operations all over the world.My concern is that trhere is a high probabilty of similar situations cropping up inb the remainder of 20 companies across the world. Then that leaves the organisation with massive write offs. I have asked many times about the break up of receivables but the comnpany has never provided how old and what receviables in which country are.Thatat least gives investroers an idea about the risk. Not providing them raises red flags and doubts about them if they will ever be recovered

[Shoumik]

The last year profit of rs 445 crores and for so many years gone by is a testimony enough which demonstrates that receivables are being realized smoothly and are entering into the profit stream year on year.

[Shoumik]

The book value of rs 3000 crores is built on basis of net earnings added to general reserve and not on the basis of  receivables added to general reserve. So nothing to worry about.

[108BULLGURU]

Dear Shoimik,

Thanks for both your responses.

Normally that should be the case as you said re profits and revenues et.. However it will help to know re the break up in terms of ge of receivables. Only then one can establish what is high risk receivable and what is not. Company may be carrying forward the old receivables turning stale or dead for too long.

Number 2

That is understandable.But these receivables also are counted in working out revenues and profits.The annual revenue is inclusive of these receivables and hence so is net profit. Albeit company has been showing as carried forward profits all that have accumulated yr over yr.

[sateanna]

receivables actually determine the cash flow of the company. Brightcom currently is around average of 120-130 days …the aging of the the same is not known. Say if 50% of the receivables is over 180 days it could spell trouble for the company…Infact i had lined up my question on the same, however the call was only for 40 mins ……

[108BULLGURU]

Here is some one who understands how serious the issue of receivables is. I had shares in one of the first and biggest law firm in world markets anf they folded making me lose half million dollars just because of receivables when the CEO kept on telling lies through his teeth. Dont want the same story repeating here.

[108BULLGURU]

Shame. Investors missed the MOST IMPORATNAT  question and that is receivables.

If receivables are OK.

Then we survive

If not then even LOC  will be consumed if sanctioned and BCG can still SINK.

Truth needs to be know re the age of the receivables and their completre split.

[Patelking]

Company survive without any new funding itself shows that not problem in liquidity and if see from many years receivables are constant that means company recieved revenue on time

[108BULLGURU]

Agreed that on the surafce that appears to be the case. But will be wise and interesting to know the age of the receivables and their break up. There is a high possibility that company may be carryinbg forward old hard to receive receivables and that is very high risk for the company and its investors.

This could be the sole reason of delays in getting the LOC  in place..

[Shoumik]

If you search on screener.in giving filter of free  cash flow you will find that the free cash flow for the firm for the year gone by was rs 363 crores. Yes RS 363 CRORES  FREE CASH FLOW.

Part of this has been kept for setting DAUM this year and the remaining has been added to general reserve.

[Patelking]

Last year OCF is 510 cr against PAT 444 cr. That means company got more cash 66 cr that actual profit, this indicate some recovery

[108BULLGURU]

Thanks .Interesting observation.

FCF  still remains illusive.

No hard tangible assetts to show foer. only thing is receivables.

Hnece delays and issues in getting LOC  so far.

[Shoumik]

Sir the operational cash flow for the last year was 741 crores out of which 168 crores was paid in taxes And 62 crores was used to build on current assets.  The net cash from operation after paying taxes and building current assets was 510 crores.

[108BULLGURU]

yes dear, but that is not called

FREE CASH FLOW I THINK.

I dont have an accountancy background. That is what i understand as a layman. Free cash flow is given at the bottom and is just 5-8 crores as far as i remember.

[Shoumik]

Another interesting observation is that in last 5 years working capital changes ie amount utilized to built current assets ie building on the business were -179 crores, -238 crores, -392 crores, -203 crores and last was only -62 crores.  This shows the fund required ro build and grow the business has come down drastically. Actually this year the business can grow on +ve working capital. This is best case scenario, when the business dosen’t require any capital of its own to grow. All great companies like Nestle ,Hero, Eicher, page etc are all working with positive working capital. That tell what the valuation potential of this baby is gigantic.

[Patelking]

Interesting

 

Thats i also noticed

[Author]

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