[pranil]

Dear Saul,

It’s not good idea to rest on hope of traveling to Korea to resolve daum. World over all works are happening online digitally/virtually. Even traditional businesses has adapted this new way of working. Why can’t a leading DM firm resolve this by virtual meeting?

I don’t understand this reason of non travel for daum closure. Think what work is not happening due to travel restrictions??

[pranil]

Dear Dgm, I feel we should be vigilant and learned investors and together we should put positive pressure on management.
Nothing wrong if we ask some genuine questions which are important for us to understand. We can’t work on blind faith, it’s not the right way.

[pranil]

Thanks will be great Saul.

Even otherwise we should align on key questions to be asked let’s ensure no repetition to use time most effectively.
I am going to ask question on write off, growth and return on investment.

Suggest you and other members to also decide questions to ask.

[pranil]

Yes Saul. We need the updates to understand more.

Whatever is the case, 800 cr is not small amount and there was no mention of any stress anywhere. In fact when people used to raise concern about numbers be it assets, receivable or investments SKR always assured them of nothing wrong. So it is not easy to digest this write off, as a long term investor I really feeling bad about the transparency.

I hope the updates restore faith.

[pranil]

There is good chance that this write off is forced by BDO; if it is so it only signifies the importance of audit by reputed auditor.

Till last call SKR assure us quality of receivables and assets. So I don’t understand this big magnitude of write off. Imagine it’s take of rs 15/share which is 50% higher than its current price.

[pranil]

This is second big write off after one big write ofF of 250 cr in receivables in 2012.
Let’s see what are details.

Secondly I was never comfortable our company not paying off loans but the reason was given there are issues and litigation. But then can we justify delaying tax payments time and again?? It’s not sign on good ethical company. We must request SKR to Pay off statutory payment on time. Why there is so much desperation to invest money in business that it takes priority over statutory payments.

[pranil]

272 cr invested in business in fy20. Total investment in last 6 years stands rs 1512 cr. This is significantly high and it is interesting to know if we can expect any kind of step change in returns.

In my industry we can set 2-3 big size plants in India with this kind of investment.

[pranil]

One more quarter and year of flat numbers….it’s almost 5 years.. hope we will see growth in 2021.

Dividend of 5 pc; don’t understand what purpose it will serve. In fact it may hightlight cash issues company facing. Better no dividend should ve considered.

No announcements on pending issues.

In all avg show.

[pranil]

Dear Buffet,

Yes no DDT this time.. however it will be taxable income in our hand. So if we are in 20% income tax bracket, we will pay 20% tax.

I too hope 20% dividend. But I think they will pay 10%

Also expect at least one announcement on pending issues.

All the best!

[pranil]

It will be great if company declare 20% dividend.
I am not going to be rich by this dividend. But it gives signals

1. Management is ready to boost confidence of investors.
2. Protect value of shareholders
3. They are responsive

Once there is good demand of stocks by genuine investors we can go way from dividend and focus to invest where it matters most. It can be existing business, new business or even giving back to investors.

[pranil]

Newbie Affle India added in nifty smallcap Index. Good for sector?

[pranil]

You can also add 2020 numbers; we know top line and bottom line is flat for first 9 month in INR terms… so I guess in USD terms it will be lower than 2019 numbers.

[pranil]

Dear Mathew,

It’s not logical to analyse brightcom business in INR, companies assets, working capital and cash is in USD. It is same that we don’t compare Apple results in INR. From 2015 usd to inr was 62 rs and not 74.
I suggest you to please check companies presentation, it’s official numbers

http://brightcomgroup.com/wp-content/uploads/2020/05/BCGFInancials.pdf

[pranil]

Thanks Ian for your views, I respect it.

The top and bottom line are absolutely flat from 2016 to 2020. Yes May be we can say many companies disappeared while we manage to servived. it will be interesting to know how long this consolidation phase to continue. And what different some company doing who able to grow in these tough times.

[pranil]

Sure I will ask questions.

I have been chasing Company for below information. Despite at least 6-7 reminders I have not got any response. This is one question I am planning to ask.

“Dear Rajesh,

your today’s presentation for 3 Q of 2020; Net incomce mentioned is USD Mn 61.77. earlier presentaion says full FY19 year net income was USD Mn 62.40. this means that Net incomce of 3 quarters of FY 20 is almost same as full Net income of FY 19.

however reported result says net profit is of first 3 quarters in 2019 and 2020 is almost same ( Rs 336 Cr & Rs 333 Cr)

so why reported net profits is not showing the growth shown in today’s presentation?

[pranil]

Dear Saul,
Let’s not judge each other what we understand about business and performances, it’s debate we can’t conclude and not in interest of anyone. You said I judge company performance with share price. Let me clarify, I don’t. There are many parameters of performance and few important parameters are growth and cash generation. I have shared real company declared numbers and it will be better if you share details what performance Parameters you are referring to as you are saying company performing well over last 5 years.

[pranil]

My Friends; I want to reiterate that I am investor and well wishes of BCG and it’s investors. And I also believe despite of all the critics, BCG is grossly undervalued. Let’s keep patience. Be ready to criticise and praise management as per the merits/performance. We all can be great force if united. Thanks

[pranil]

Dear Saul and other investors, I want to bring your attention to one very important aspect of BCG performances today. My objective is not to create negativity but to create awareness and I request you all to ask this question to Mr Reddy.

Request you to go through BCG financial performance in USD term which is published by management this month. Comparison is usd term of financials is more logical as their major business in USD. Now see the EBITDA it was usd 97 MN in 2015 and now in 2020 it is usd 108 MN. So it’s almost flat in 5 years… now we feel that we didn’t grow because we didn’t have cash to invest, right. Now check their cash flows over this 5 years they invested minimum 1000 cr or usd 150 MN in business. So imagine BCG earned usd 10 MN additional Ebidta by investing 150 MN usd!! Are we as investors happy with these returns?? How long company will keep investing shareholders money in business without generating avg financial returns?? Now can we be 100% sure that if we get 100 US MN credit line, we will generate more that usd 10 MN ebitda? Can we say BCG is performing well in line with tradedesk and Affle?? Let’s ask critical questions to management.

[pranil]

Dear Saul, I just feel that it’s not fair to categorise long term investors who waited for 10 years as impatient and seeking multifold returns too fast. Yes every one understand risk of investing but if they couldn’t get any return even after waiting 10 years it is justified if they say there investment gone wrong and they sell it off. But can we call them impatient?? Everyone has different holding capacity and we can’t generalise and expect them to hold on for decades without expecting any returns.

We can’t compare Apple and BCG in any ways it’s real apple to orange comparison. If you consider all stock splits of Apple, on 1980 it was listed at 0.46 usd and by 1990 it was at 1.5 usd. It also paid dividends from 1986 to 1995. They stoped it after 1995 due to market conditions and started again in 2012. So Apple in 10 year 0.46 to 1.5 and BCG 55 (not sure but doesn’t matter) to 10. We just can’t say the plight of investors is same and hence we can’t compare their actions.

https://www.macrotrends.net/stocks/charts/AAPL/apple/stock-price-history

We need to accept, BCG has taken much more than normal time taken to create shareholders wealth and we need to share our expectations and ask right questions to management so that they understand our situation and protect our interest.

I do agree the price is not in complete control of management. But at the same time if some one influence price to great extend is Management only… can we say that management can’t influence price? ( I am not talking for 1-2 years but 5 to 10 years). Trust me over such time frame management through their performance and actions are responsible for share prices; no one can shrug off this responsibility.

[pranil]

@ Saul, just seek your view on time frame of investment, what is right time? Some investors are in brightcom for 10 years and most of longterm investor are more than 5-6 years. And on avg investors lost 70 to 80% of their capital. I am seeking this because I read your below sentence, I understand globally 3-5 years is good time frame to expect returns.

“ Our markets just want quick results. They don’t want the company to increase the profits many times, they just want small amounts in dividends.”

[Author]

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