[whyShares]

BCG Profit for first 9 months of the financial year (1st April 2022 to 31 December 2022 is: 1,57,250.33.

This is 50% more than the profit for the full financial year (1st April 2021 to 31 March 2022) = Rs.1,03,484.46

So on completion of the full financial year 2022-2023 expect profit to more than double from last financial year.

What is holding back the share price of BCG is mainly due to the scare mongering by BCG Shorters.

A big hue and cry is made of the Forensic Audit. SEBI ordered the fornsic audit because BCG had written off some “impared Assets”.

Impared Assets are like the value of expired medicines, the value of which has to be written off when it is destroyed.

In Software business a value is given to their software. When new software is developed the old software becomes expired or of no value and written off from the books.

This is a normal accounting practice by all software companies. When BCG did it it was made into a big issue and the Shorters had a field day.

Hindenberg is a shorter of Adani Group. That should tell you a lot.

[whyShares]

BCG net profits for
Dec 2022 Quarter: 544 crores
Dec 2021 Quarter: 371 crores
544/371=1.466 – nearly 50% increase

EPS (Earnings per share) is less in Dec 2022 at 2.69 compared to 3.57 in Dec 2021. This is because the number of shares have almost doubled after bonus issue, etc.

In Dec 2021 the price of BCG was about 200. The Company is doing well now and if the same valuation as in Dec 2021 is applied now, the share price should be 150.70

200*2.69/3.57=150.70

[whyShares]

Here is image of BCG Peer Compare on Ticker Tape
https://www.tickertape.in/stocks/brightcom-group-BRIH/peers?table=valuation

Attachments:

1. 

   BCG-Peer-TickerTape.jpg
   

[whyShares]

There are a lot of problems associated with Brightcom but, no one denies the fact that they have mastered the art Ad Tech and their software does work and is being used widely for millions, if not billions, of Ad impressions daily.
I am invested in this stock for years and believe in it. It is one of the most undervalued stock in one of fastest growing industries in the world. Have faith, BCG will have its day soon

[whyShares]

Why the increase in FII investment in BCG is sending the right signals

Brightcom gets about 90% of its sales from foreign countries. There are doubts whether some of these accounts are cooked. The forensic audit was ordered by SEBI for this reason.

Only the FIIs have the resources to check BCG operations in foreign countries, especially BCG operations in South America.

So the fact that the FIIs are increasing their stake in BCG should give us great confidence in BCG

[whyShares]

The important fact to note here is that the circuit of BCG was increased directly from 5% to 20%. Of the 479 stocks revised, only 17 stocks, including Brightcom, went from 5 to 20% directly. This is a strong indication that the exchanges and SEBI are convinced that BCG is a good Company with no outstanding issues. The next step in BCG’s evolution hopefully, will be it inclusion in the F&O segment.

For inclusion in F&O segment, a stock is chosen from among the top 500 stocks based on average daily market capitalisation and average daily traded value in the previous six months.

[whyShares]

*BCG circuit limit being revised to 20 per cent*

Since the exchanges revised BCG circuit limit, we can assume that the Forensic Audit cleared BCG of any wrong doing and the exchanges consider BCG as a good company worthy to be placed among the leaders of Indian Companies. Expect BCG to do well in future

https://www.dsij.in/dsijarticledetail/bse-revises-daily-circuit-limit-for-479-stocks-including-adani-wilmar-brightcom-group-and-many-more-26812-1

[whyShares]

BCG’s acquisition of Mediamint deal cancelled instead there will be strategic alliance between both parties. May be for the good, but will be blown out of proportion by nay sayers. May hit LC tomorrow

https://www.bseindia.com/xml-data/corpfiling/AttachLive/082410a5-f8fd-45c0-ade7-4082f059bbb2.pdf

[whyShares]

Why BCG investing in Quantum Computing, a futuristic technology?

Recently BCG announced that they are starting a new division Brightcom Quantum Computing. Not much attention has been given to this news in BCG forums, some claiming that it is a gimmick to manipulate BCG share price. But in my opinion, this is big and will herald accelerating growth for BCG. The reasons are as follows:

BCG’s computers have to decide which ad to put on a person’s phone or computer between the time he clicks the search button and the the search results appearing. This is Programmatic advertising and is a system that automates the processes and transactions involved with purchasing and dynamically placing targeted advertising content on websites or apps. All this must happen in less than a second.

So the company that has the fastest computing power will always be a leader in the business. Brightcom believes Quantum Computing is on the verge of exploding due to technical improvements in hardware and software. As a result, this is an excellent moment to invest in future development engines for the company. It marks the next step in Brightcom Group’s technical innovation.

What Quantum Computing is explained very well by the leading manufacturer of Quantum Computing hardware.

https://www.ibm.com/in-en/topics/quantum-computing#:~:text=Quantum%20computing%20is%20a%20rapidly,available%20to%20thousands%20of%20developers.

[whyShares]

Below is link to MornigStar data on Major institutions (FPI) investments in BCG.
FPI investments in BCG is steadily rising. Yesterday, 29 August 2022, they bought Nett about 9 Lakhs.
These are some of the world’s biggest investors, and the very fact they are increasing their holdings in BCG should encourage us.
With daily BCG volumes in BSE and NSE well over a crore, and the fact that it is not trading in UC or LC, I feel is an indication that the brokers are slowly losing their grip on BCG.
These are just my personal observations – they may not be accurate
https://www.morningstar.com/stocks/xnse/bcg/ownership

[whyShares]

This is my analysis of what is happening to BCG shares. Pure Guesswork!
Please add your thoughts

There are 201.8 crore shares in BCG, out of this, may be 50%, are in the hands of Promotors, FIIs and long-term investors. The other 50% is in the hands of speculators. Before the warrant and bonus issues, there were only about 50 crore shares and most of the shares were with promotors and long-term investors. Once the shares grew 4 times the original, too many shares are floating in the market with majority held by speculators and news driven investors. This is easy picking for broker gangs to manipulate the share price and make up to 10% margin when the share price is driven up 5% upper circuit and minus 5% lower circuit.

So right now the price of BCG is in the hands of Broker cartels and will remain so for some time. Foreign and Domestic funds and also long term investors are picking up shares regularly and the free floating broker shares are reducing daily. Only when this free floating shares come down will BCG show its true colours. May take up to 6 months

[whyShares]

There were strong roomers that the Big Bull (RIP – I am one of his fans and admire him a lot) was controlling the Broker Cartel that was manipulating BCG price with circular trade. Now with the Big Bull gone, the cartel is without a director to set the scenes when to sell, who sells, who buys, what price etc. So the whole group may be holding on to crores of shares not knowing what to do. There could be a scene with panic selling with crores of sellers far outweighing the buyers and there could be a series of Lower circuits.

In all probability, I am tottally wrong and these things are not going to happen. It could be my paranoia. But I will not be buying BCG now. If at all it goes below 30 then I will buy as much as possible.

In all probability the great man Junjunwalla was not in the least involved and it may all be my fantassy and I am sorry if it hurts anyones feeling.

[whyShares]

MFs investing in BCG

So far located these 4 MFs with BCG included in their portfolios. Links to Portfolio holdings included:

***Kotak Nifty Alpha 50 ETF
https://www.moneycontrol.com/mutual-funds/nav/kotak-nifty-alpha-50-etf-regular-plan/MKM1409

***Motilal Oswal Nifty SMCP 250 index
https://www.moneycontrol.com/mutual-funds/motilal-oswal-nifty-smallcap-250-index-fund-regular-plan/portfolio-holdings/MMO064

***ICICI Pru Smallcap Index
https://www.moneycontrol.com/mutual-funds/icici-prudential-smallcap-index-fund-direct-plan/portfolio-holdings/MPI4527

***Nippon India Nifty Smallcap 250
https://www.moneycontrol.com/mutual-funds/nippon-india-nifty-smallcap-250-index-fund-direct-plan/portfolio-holdings/MRC2858

[whyShares]

Reposting with more accurate figures regarding the outstanding paid up number of shares. Please comment regarding the accuracy of these calculations. Thanks

Even though the results look extremely good, it should be noted that in 2020-21 there were only about 50.76 crore shares of Rs.2 face value. Now in 2021-22 there are about 201.79 crores shares of Rs.2- outstanding.

This means that the EPS (Earnings per Share) for year ending March 2022 is only 4.52 compared to 9.51 the year before.

The market value of a share is measured by its PE ratio (Market price/EPS). The pre-bonus share price high was 205 or so, which means a PE ratio of 205/9.51 = 21.5

After bonus now the price is about 65 which means a PE ratio of 65/4.52 = 14.38 say 15.

A PE ratio of 20 is considered a fair value for a company with steady income, thus a fair market price for BCG now is 4.52×20 = 90.40

It should be noted that Companies like infosys, TCS and other companies in the IT sector has an average PE ratio of 30, in which case, BCG should be at 135.60

BCG is in Ad Tech sector and the best comparison for the Ad-tech industry is the company ‘Affle’ whose PE ratio is 65. At this PE ratio BCG price will be 293.80

BCG is improving and every year its EPS and its PE ratio should increase. So look forward to a bright future for BCG.

[whyShares]

In an article published on ET Prime headlined “Stellar returns or just a mirage? How Brightcom’s fundamentals don’t support its valuation”
Quoting some stements which need to be addressed
1.
“Suresh Reddy, its founder and promoter — a technocrat based out of Hyderabad, sold 90% stake in the company, which eventually reduced the total promoter stake by 4%, but warrants were also exercised. Hence, the total number of shares for the company increased by 16 crore.”

2.
“While the ad-tech business is on a growth path, the company’s fundamentals are shaky. Brightcom has huge receivables on its balance sheet that are worrisome. Around 56% of the total current assets are trade receivables and 34% is accounted for loans and advances. The present sales-to-working capital ratio works out to less than 2x, which shows that there is a lot of pressure on the running cost of the business. ……
……..
There is nothing wrong with this. It is a commonly followed practice because the company eventually receives its payment. But there is a maximum waiting period beyond which it makes little sense to keep writing in the accounting books as ‘receivables’. Account receivable days is the metric used to calculate the number of days before which the company receives its payments. This number depends on industry to industry.

Pharma has an average 68 receivable days, for manufacturers like capital goods it is 77 days. IT, which is more of software services, has an average 62 receivable days. For the Nifty 500 companies, removing one outlier Vakrangee, the average trade receivable days number stands at 55. But Brightcom has 142 trade receivable days — this is two and a half times the total average.

Not only that, Brightcom’s trade receivables, which was at around INR750 crore from FY12-FY17, increased slowly thereon until it shot up in FY20 and FY21.

“High trade receivable days don’t work very well in the long term in terms of its impact on revenue,” says Abhay Aggarwal, founder and fund manager, Piper Serica, a Sebi-registered portfolio-management service (PMS).

Loans and advances
This metric falls under non-current assets in the balance sheet. As the name suggests, it is the loans or advances given to receive them in the future with interest. This number stands at INR720 crore for Brightcom for FY21, which is almost 20% of its total assets.”

3.
“Free cash flow or FCF is the cash available with the company after all the expenses for working-capital requirements and capital expenditures are met.

Both trade receivables and loans and advances together constitute 62% of the total revenue. This is not just for FY21 but has been the case since FY18. And since the receivable days are long and loans and advances are huge, they have directly impacted the FCF.

FCF can be negative for one or two years, but it cannot be the same for an extended timeframe. In Brightcom’s case, FCF has been negative for a decade. This means the company has not generated cash in a very long time.

Summing up, the revenue numbers look inflated. Perhaps that is why mutual funds have not touched the stock, while long-term individual investors sold their stake at the very sign of ‘exit’.

4.”Should one invest in this stock?
Based on fundamentals, the company has a long way to go to command its present valuations. The fact that the business has not shown any growth in an environment where tech-related companies are growing at a rate of 15%-20% annually over the last five years, Brightcom shows little promise. The promoter has sold out much of its holding. This does not look good for new investors who want to buy the stock.

With a Sebi investigation calling for a forensic audit and more questions about the growth of the business, investors need to be careful before they take any investment decisions.”

[whyShares]

Nothing to do with BCG, but should be of interest to many in the group

Congratulations to all Senior Citizens 🙏🏻🙏

Great News
Air India TATA passes the air fare for all senior citizens of Indian nationality and permanently residing in India, over 60 years of age get Air India Flight tickets at half the price for travel within INDIA.
Please inform Senior Citizens belonging to your families and friends

http://www.airindia.in/senior-citizen-concession.htm

[whyShares]

Tomorrow BCG will be quoting 61.25 (+ or – 5%).
This is because of the T+2 rules, any one buying BCG tomorrow will not be eligible for bonus and thus prices from tomorrow should be adjusted by the exchanges to ex-bonus – 102.10 x 0.6 (3/5) = 61.25

[whyShares]

Brightspot, I could not find a direct link to Brightcom on the FTSE website.

I wonder if this bit of news on moneycontrol can be verified
“FTSE Global Equity index to buy 5.9 Million shares of BrightCom Group effective March 17,2022”
https://m.moneycontrol.com/india/messageboardblog/message_thread/102147044/103959360

[whyShares]

Brightcom added in London FTSE Emerging Micro cap Index fund list dated 28 Feb 2022. BCG is at 4th rank. This is international recognition for BCG as a growth stock.

FTSE International Limited trading as FTSE Russell is a British provider of stock market indices and associated data services, wholly owned by the London Stock Exchange and operating from premises in Canary Wharf. It operates the well known UK FTSE 100 Index as well as a number of other indices.Wikipedia

https://research.ftserussell.com/Analytics/Factsheets/Home/DownloadSingleIssue?issueName=MMCE&IsManual=false

[whyShares]

Brightcom compared with Trade Desk Inc., the world’s largest AdTech Company.

This video was posted almost 5 months ago, but saw it only today, even though I always scan YouTube for BCG videos. May be there are others like me who have not seen this old video and it is posted for their benefit.

[Author]

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