[hw_tw]

@Rathi_b and team

Thanks for taking the initiative once again for the benefit of all the investors

One important request from my side

If possible, please do record the conversation … video or audio anything would work

Sorry for the ask … this is to avoid any kind of criticism coming later that this is all scripted

Some checks from my side

– In case shares were sold even before the FA / Jan 22 SHP, please check the reasons for the same

– Plans to increase SHP (LLPs acquisition, Open market purchase etc; )

– Reasons for not publishing Audited results of subsidiaries and please insist on publishing the same with a clear timeline to do so even without Daum closure … Can’t take Daum as as excuse especially when the priority of this item is low

– If possible please ask for Audit documents of all subsidiaries and verify them … Make a note of any adverse comments you would see in these

– Check if the FA is for the asset impairment or for the entire accounts as stated in the SEBI letter

– Status of FA in terms of milestones achieved and target timelines if any … Please confirm if they are able to move forward without CFO and CS

– If possible please ask for latest mail exchanges between BCG, SEBI and Deloitte

– Ask for a live Product demo and any latest Report / Analytics page showcasing the overall Impressions count they are achieving on daily, weekly, monthly basis

I am not sure of the time you and others would be spending over there and the amount of details SKR and team would be willing to share … Please try to gather as much information as possible

[hw_tw]

Its been 2.5 months since CFO’s exit and I am sure company would be aware of the exit a good 2 months before. In total a good 4.5 months time has passed by in finding a replacement… And a good 8+ months for a CS … This is quite a good amount of time to find a replacement

I am not sure how much it is pinching thier day to day operations but for investors it is like pinching, punching and burning … even the long termers will be losing hope with each passing day

[hw_tw]

@JackSparrow13 – please refer to my earlier post #13853

Hostile takeover angle still seem to be playing a role somewhere behind all these events… at that time I was thinking HT by acquiring LLPs … but it looks like the whole PW seems to be created to protect from any HT as the promoters stake was low and the company suddenly saw a big change in business due to Pandemic

Looks like things are in right track as the promoters has got reasonable and probably a comfortable stake atleast as per them

With the price falling down and business growing healthy, probably they might be looking to add some more and increase it

[hw_tw]

During the LLCs acquisition, some people in MMB were talking about a new system which would come into effect soon …I gy this new system will record all the transactions are automatically and there is no explicit need to inform the exchanges

So if there are any new transactions we wouldn’t come to to know anything till the end of quarter 🤦

And I guess this doesn’t replace the manual upload of quarter end consolidated SHP document… hope the exchanges strengthen this system further with mechanism to validate what is been reported is correct or not

Also this system would apply to market related transactions and any offline or indirect ones like the LLPs acquisition needs to be reported explicitly

[hw_tw]

At this stage we are trying to make interpretations from what’s available in public domain… Not sure if we are totally or partially right in our findings or not

For example, we don’t know whether he had really sold shares or was showing shares owned under different accounts or by his associates as his own (assuming he will eventually own them somehow without informing exchanges) or it’s some other case

Things will get clear only when we get direct answers from the management … probably a special conf. call updating shareholders on what really had happened and taking subsequent questions from them or the event of increasing stake in one more LLP and taking stake above previous levels thus reassuring investors about their continued commitment

Given the benefit of doubt, the way I look at it is to take both positives and negatives from it and weigh them

In this case negatives are linked to the past event and positives are linked to the future and is getting more weightage from me … especially that this event is not linked to FA and the percentage is actually increasing and not decreasing

[hw_tw]

Sharing a comparison sheet

– Column D is SHP uploaded to MCA
– Column F has the bonus shares added

Notes
– VK seems to have sold around 22.75 lakhs … this number seems higher than what SKR mentioned
– SKR has not sold any shares
– 7.05% as on March 21
– 3.69% as on March 22 post bonus and PW Shares addition

[hw_tw]

@sac6310 – Sorry for the delay… lot of technical issues with the MCA site and I am still not able to access it properly

Coming on to the March 21 SHP file which was uploaded as March 22, I did a comparison of the actual holdings of the promoters in this file with the ones uploaded to exchanges … these are my findings and observations… Please correct me if I am wrong

Looks like Promoters holding was actually low last year March 21 itself … Not sure when they had reduced it and whether it was in 2021 or even before that

When we look at the file, the Promoters actually had only 3.57 Cr shares in total as on March 2021 … note this was pre first bonus

Post bonus this number is 4.47 crores

In percentage terms this is around 7.05% in March 21 and in March 22 this is 3.69% which is near to 3.59% as stated in April 5th SHP post LLPs acquisition

Assuming the above calculations are true and MCA figures are the correct ones these are my observations

Negatives
– Promoters stake was reduced long back
– Exchanges were not informed before

Positives
– Given the fact that BCG share price was below 10 rupees this doesn’t look like the case of Promoters selling stake to make huge 💰 of 1900 odd crores

– Stake was sold long back and not sold now because of ongoing FA

– Promoters are increasing stake now by acquiring LLPs

Overall I see this is positive keeping aside the past

btw, this also confirms the statement made by SKR
– Not sold any shares in last 12 months (MCA file confirms that)

[hw_tw]

Thanks to BCG management for sharing Seasonality nature of the business … Request management to please highlight this factor in all Quarterly Presentations too

The key takeaway for the investors is that BCG’s numbers needs to be compared on a YoY basis and not on QoQ basis

The reason being, BCG’s sales is seasonal in nature … It records higher sales during festive times due to high demand arising from advertisers compared to other periods

We see a similar pattern in other industries like AC, Refrigerator business peaking in Diwali and Summer periods, Tractors during Mansoon, Bata during School opening times etc;

Even post this update, I still see messages from some experts comparing QoQ sales … looks like some serious agenda against the company 🔥

In last two weeks we got updates on two pending items, one on Guidance numbers and now on the Seasonality aspect … This is a good sign … Hoping this momentum continues and we get to hear updates on other pending items too 🙏

[hw_tw]

I was just thinking how the recent SHP issue has hogged all the limelight over shadowing even the FA issue …

Recalling some of the concerns / allegations which were addressed in the recent past … Note, at some point of time all these were highlighted as the main concern and everything would be fine if this particular item is addressed … and finally when they were addressed Investors sentiment changed only temporarily and most of the investors completely forgot about them shifting focus to some new ones 😃

Addressed
– Numbers are almost stagnant YoY, there is a very little growth

– Growth is due to Covid and it will not be there in coming years

– No real profit generated, burning cash

– Can’t expand both organically as well as inorganically for the above reasons

– No cash to pay back loans

– Company is going to delist

– BCG doesn’t pay dividend

– BCG pays very less dividend and doesn’t have cash to pay dividend

– Brightcom Israeli division is not owned by BCG (hint : Jacob Nirzi is shown as President in recent presentation)

– BCG Indian division revenue is pretty small (hint: MediaMint acquisition)

– BCG has very less number of employees

– BCG’s clients are unknown

– BCG has no FIIs / Mutual funds invested in it

Note, some of these still keep popping up and you know why 🤔 😉

Having looked at these, let’s also look at some items which are either partially addressed

Partially Addressed
– Trade Receivables are high
– Trade Receivables period is high
– Sales has come down on QoQ basis

Most of the long term investors are aware of these and doesn’t bother about them … But to address these, my request to the management is to please include these items in all Quarterly Investor Presentations … the idea is to make the investors aware of the nature of the business so that all the existing as well as new investors doesn’t complain about it

Needless to say the content and charts has to be clear in conveying the message across

For example you can show a chart of Trade Receivables to Sales percentage ratio on a YoY basis …
Similarly show a chart of YoY sales instead of a flat table or add a footnote explicitly mentioning the Seasonality aspect

Finally let’s also look at the burning concerns list 🔥

To be Addressed
– No Analyst attends BCG’s concall … Possibly setup Investor meets as done before

– No response to Investor’s emails … Can tie-up with Investor’s relationship services company

– Foreign subsidiaries aren’t Audited and so aren’t published (sorry, EY audit of Israel division statement hasn’t had any impact)

– CS, CFO are not appointed to delay FA

– Management cashed out huge amounts by selling 19 Cr shares (no impact seen from concall statement)

Hoping company takes some quick actions on all these pending and to-do items asap and clear the clouds for everyone

[hw_tw]

My views on the recent Investor’s presentation

– The guidance numbers will dispel the fears spread across that these were kept on hold because of FA

– The guidance figures are largely inline with the numbers SKR has indicated in previous two calls … also indicates that FA / SHP change is not at all linked to this

Coming on to the actual numbers 7100+ topline, 1300+ crores bottomline … At the midpoint a Topline of around 42.5% growth and the bottom line of around 44% growth is a superb growth … especially considering that these numbers are coming on back of a strong 70+% previous year growth rate … also given the tough headwinds across the world in the form of war, Inflation, recession etc;

We are a tad below the billion dollar sales mark … And I feel this number will be revised up and come close to the landmark figure when we add MediaMint numbers midway and Audio AdTech numbers probably in Q4

We didn’t get Quarter wise breakup this time and this would keep some punters busy with their guess work as we approach results 😃

The other good point is the entry of known large Institutions like Goldman Sachs and Morgan Stanley

In terms of the valuations, in normal conditions market would have given a 30 to 40 PE range for this kind of growth rate or even above basis overall market sentiment

Right now this PE figure seems to be discounted largely for FA, SHP and other HR reasons … This would definetly improve but I guess slowy till the time we get some positive updates on FA and SHP and would reach to its fair value once everything gets cleared

Having said that, listing some clues which the market is either ignoring or not so confident about at this stage

FA
– Mr. SS’s positive statement which market reacted positively but right now is clouded by SHP

– The latest results and guidance numbers both inline and has no impact on the ongoing FA observations if any

Promoter’s SHP
– SKR’s statement that both he and VK has not sold any shares … As speculated by many this Indicates that this is a temporary phase and these shares would come back eventually under Promoter group either directly or indirectly (Hope I am not wrong in this interpretation)

– SKR and Co acquiring stakes in LLPs and making them part of Promoter group … Indicating that, at some point of time the same process would happen with other LLPs and Individuals PW holders associated closely with SKR like Subrato Saha

[hw_tw]

@sac6310 – I was able to get access to this document from MCA site.

The shareholder’s document (part of Other Attachments folder) was uploaded recently on 20th May … but it was actually an old document dated 31st March 2021 and not the latest one … It has around 66K shareholders only and wasn’t having names of Shankar Sharma or other recent allottes

Please let me know if you there is any other document which I can look into

[hw_tw]

@JackSparrow13 – I am aware of this update… BCG shares were allotted to MediaMint sometime in Feb and we were expecting the Cash transfer to be done by end of Feb or by March …

But there is no update and there was no timeline given even in recent call in June which is surprising

We are not aware the delay is from BCG side or from MediaMint side.

Note that BCG is already mentioning it’s employee strength of 1700 people which includes MediaMint too

A simple update to the exchanges on the current status and target timelines would avoid any speculations spread across

[hw_tw]

I can understand the delays in Items where things are totally not in your control … but for othe items management should have closed them quickly

This is giving a lot of room for the debate between both sides … On top of it management making statements against is adding fuel to these debates and daily one side or the other celebrating victory

For example items like these … (I am focusing only on the actual business leaving aside other governance related matters)

1/ Response to FCF related question … there is already a YT video stating FCF is not what SKR claims and is much lower at around 80Crs only

2/ MediaMint acquisition – there is no timeline yet to close this deal … In what was looking like a last step of just writing a cheque/ bank transfer this item is pending since last 3 months and there is no timeline yet … Not sure why this is not moving further

Request the management to close these kind of items quickly so that investors can get some confidence… otherwise investors, including long termers will find it difficult to digest all the negativity surrounding and would end up taking wrong actions unless that’s the strategy of management

[hw_tw]

@sac6310 – I couldn’t login to MCA portal due to some technical issues… Could you share either a screenshot of it or a high level details of SKR and other Promoter holdings

[hw_tw]

Vanguard has added significant portion recently. The initial estimates were to add around 85 lakhs but they have added more units subsequently and are holding around 1.85 crore units

As per StockEdge bulk deals list Vanguard has never made a bulk deal in BCG, but they were still able to gather large quantity / crores of units … Could this be a case of direct transfer from promoters …🤔

https://sedg.in/9u43kx6i

Apart from the list published by SKR, a known name Fidelity Management is the new entrant in the list of Institutions holding a small portion of 2 lakh units

[hw_tw]

The key takeaway for me in this call is SKR’s opening remarks where he hinted on the guidance numbers

SKR has mentioned that we are looking at 68% average growth in this year … but this might need to be adjusted for things like War, Instagram issues etc;

Assuming the impact of these things is between 10 to 15% or in a worst case scenario it could probably come down by 20% the guidance figures for this year will be anywhere between 48 to 58% growth over last year sales of 5000 Crores

So the estimated Revenue figures would be between 7400 to 7900 Crores or around 1 billion dollars which is a significant landmark

Assuming the EBITDA margins and FCF ratios remain at same levels as before the PAT numbers will be between 1300 to 1450 Crs and a huge FCF of 600+ Crs

Having said this we need to wait for a more concrete and detailed guidance numbers from the management which would be shared soon … Hope it will be shared ASAP ☺️

On a lighter note, BCG management is like “CG, CG, CG … We don’t like it, but Investors like it” … ☺️

[hw_tw]

Q4 FY22 Conference call recording

[hw_tw]

I guess there will be lot of questions from the direct callers related to FA, SHP, CFO/CS appointmentsl etc; … I am not covering them and also limiting my questions list … request @admin to please remove any redundant/ non important questions from this list

On Overall numbers
——————–
– Thanks SKR garu for a strong set of numbers once again beating industry growth rates … however we fell a bit short from the guidance figures … Could you explain the reasons for the same

– What’s the impact we see from Ukraine operations

Receivables
————
– Receivables were 2095Cr in Q3 which is reduced to 1881Cr in Q4 … Considering most of the receivables were from Q3 and were expected to be collected in Q4 this reduction is small … do we expect this figure to remain same or further reduce in this quarter and if so to what percentage

– Could you share Receivables Ageing sheet across your subsidiaries similar to the one shared post last year’s Q2 numbers

Guidance
———
In case guidance numbers for this year is kept on hold request SKR to please answer the following questions so that the investors get some idea

– Given that we had already completed 2 months in this quarter could you share a ball park estimate for this quarter

– You had mentioned that “Agencies are projecting 68% average growth in 2022 vs 54% growth in 2021” … Can we expect BCG to do better than this growth rate or somewhere around that rate

– What’s the growth rate we are targeting for the ROE and FCF numbers

Acquisitions
————
– What’s the reason for delay in MediaMint acquisition completion … Is it on hold, can we expect this to be closed in this month

– Given the valuation of AdTech companies across the world has come down by 40 to 60%, will there be any change in the target Audio AdTech valuation

Quarterly Investor Presentation
——————————-
– Along with the results, request SKR and team to please share a quarterly Investor presentation detailing your Financials, Key Metrics across quarters / years along with Product Updates

[hw_tw]

Guidance numbers for this year is also pending since long… Not sure if the delay is for CFO appointment or something else

Request management to please share it soon on a comparable basis without MediaMint

[hw_tw]

It will be one week post Apr deadline given by the management for CFO appointment… Unlike bonus issuance, this action is totally in the hands of the company and not dependent on exchanges the general expectation is that company would stick to its timelines

It would be better if management issues an update soon with latest updates if any along with a new timeline

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