Mehabe score: 7 G Factor: 3 Piotski Score: 7 The stock has a rating OBSERVE & HOLD. The mehabe team score is reflective of its fundamental and technical merits. A rating above 8 is considered good buy. The stock has a G-Factor of 3 and Piotski score of 7.
Description
Formed in 2010 as Lycos Internet Ltd., the company was renamed to Brightcom Group Ltd in 2018. The company is a global provider of online or digital marketing services to direct marketers, brand advertisers, and marketing agencies through its three major divisions viz., media (Ad-Tech and digital marketing), software services and future technologies. Site:BCG Main Symbol:BCG
Stock trades at 172.0, above its 50dma 156.22. It also trades above its 200dma 85.98. The stock remains bullish on techicals
The 52 week high is at 204.80 and the 52week low is at 5.32
Price Chart
P/E Chart
Sales and Margin
Strengths
– has reduced debt.
– is almost debt free.
Weakness
– The company has delivered a poor sales growth of 4.89% over past five years.
-Dividend payout has been low at 0.36% of profits over last 3 years
-Promoter holding has decreased over last 3 years: -16.76%
Competition
– The industry trades at a mean P/E of 35.8x. Tata Elxsi trades at the industry’s max P/E of 87.03x. BCG trades at a P/E of 30.0x
– Industry’s mean G-Factor is 3.2 while the mean Piotski score is 9.0. BCG has a G-Factor of 3 and Piotski scoreof 7.
– Average 1 month return for industry is -6.2%. The max 1- month return was given by Tata Elxsi: a return of 29.84 %
Quarterly Results
Sales for period ended Dec 2021 is Rs 2021.0 cr compared to Rs 879.0 cr for period ended Dec 2020, a rise of 129.9% .
vis-vis 250.0 for period ended Dec 2020 .
Operating Margins contracted -28.7 bps for period ended Dec 2021 vis-vis Dec 2020.
Company reported operating profit of Rs 569.0 cr for period ended Dec 2021 and operating profit margin at 28.2 % for same period.
The EPS for quarter ended Dec 2021 is Rs 3.57 compared to Rs 2.04 for previous quarter ended Sep 2021 and Rs 2.18 for Dec 2020.
Profit & Loss Statement
Profit&Loss Comments
Company reported sales of Rs 4479.0 cr for period ended TTM vis-vis sales of Rs 2856.0 cr for the period ended Mar 2021, a healthy growth of 36.2%. The 3 year sales cagr stood at 20.2%.
Net Profit reported at Rs 829.0 cr for period ended TTM vis-vis sales of Rs 483.0 cr for the period ended Mar 2021, rising 41.7%.
Company recorded a healthy Net Profit CAGR of 23.1% over the last 3 years
Balance Sheet Statement
Cash Flow Statement
Cash Flow comments
CashFlow from operating activities was positive.
CashFlow from operating activities: Rs 460.0 cr for period ended Mar 2021 vis-vis Rs 89.0 cr for period ended Mar 2020
Sales Growth
Profit Growth Statement
Profit Growth Statement
Stock Price CAGR
Return of Equity
General Comments
– The company has had stable/constant Return on Equity (RoE) metric. The RoE on Last Year basis was 16.0% compared to 15.0% over the last 3 Years. – The stock has given a return of 2895% on a 1 Year basis vis-vis a return of 316% over the last 3 Years. – The compounded sales growth on a TTM bassis is 21% vis-vis a compounded sales growth of 6% over the last 3 Years. – The compounded profit growth on a TTM basis is 31% vis-vis a compounded profit growth of 6% over the last 3 Years.
Ratios
Shareholding Pattern
– FII shareholding has remained largely constant. The Dec 2021 fii holding stood at 1.87% vis-vis 0.38% for Sep 2021 – Public shareholding has remained largely constant. The Dec 2021 public holding stood at 75.73% vis-vis 77.22% for Sep 2021
Conclusion
– has reduced debt.
– is almost debt free. – The company has delivered a poor sales growth of 4.89% over past five years.
-Dividend payout has been low at 0.36% of profits over last 3 years
-Promoter holding has decreased over last 3 years: -16.76%
Fundamentally, the stock remains weak on business fundamentals. Weak near term results have dampened and questioned business drivers. We suggest to wait for a upturn in business performance.
Technically, the stock trades above its 50 DMA 156.22 and is trading at 172.0 It has shown near term bullish momentum contrary to business fundamentals. We suggest to observe price action. However as investors, who like to avoid timing the markets, we suggest to avoid the stock
