Brightcom Group Ltd

NSE:BCG

Earnings Call Analysis

Earnings Call Transcript 2024-Q1

[Operator]

Good evening, ladies and gentlemen. I'm Pelshia, moderator for the conference call. Welcome to Brightcom Group Limited Investors' Conference Call. The duration of the call will be for 1 hour 15 minutes. We have with us today Mr. Suresh Reddy, Chairman and Managing Director; Mr. Narayana Raju, Chief Financial Officer; Mr. Peshwa Acharya, President, Group Strategy, Brightcom Group Limited. [Operator Instructions] Please note this conference is recorded.Before we go ahead with the conference, Brightcom Group would like to mention that during the conference call, certain statements in this call, reflecting Brightcom's future growth prospects or forward-looking statements, which involve a number of risks and uncertainties that could cause results to differ materially from those and such forward-looking statements. The company does not undertake to update any forward-looking statements that may be made from time-to-time by or on behalf of the company.Now I hand over the floor to Mr. Narayana Raju. Thank you, and over to you, sir.

[Singaraju Lakshmi Raju, executive]

Thank you very much. Hello, everyone. I'm pleased to address you today to discuss our company's performance during the first quarter of 2023-'24. It is with great satisfaction that I report on the remarkable achievements we have made in the place of an ever-evolving and dynamic global landscape. Our financial results for the quarter one underscore the strength of our global presence and our ability to navigate through the challenges. We recorded exceptional revenues of INR 1,690.32 crores during this quarter, and it is about 14.16% increase compared to the same quarter last year, that is June 30, 2022.We have achieved a profit after tax of INR 321.47 crores, amounting to about 15.96% increase compared to the same quarter last year. Our EBITDA too has increased by about 14.49%, and the annualized ROE stands for 17.6%. This has resulted in an earnings per share of INR 1.59 compared to INR 1.37 in the first quarter of 2022-'23, which is about 16% increase. This growth can be attributed to a combination of factors, including our innovative projects such as audio advertisements, strategic partnerships and our teams' dedicated efforts in adapting to new trends and in relations to ongoing challenges in the mix of performance versus CPM ads. One of our key strengths lies in our global reach.During the first quarter, we started our audio advertisement operations in the U.S. market strategically positioning ourselves to tap into the emerging opportunities. This expansion has not only increased our customer base, but has also diversifying our revenue streams, especially for our standalone operations. And it is mitigating the risks associated with any single market fluctuations. Turning to the standalone financials; the revenue for the standalone for the quarter ending June 30, 2023, stands at INR 152.54 crores compared to INR 95.50 crores for the quarter ending June 30, 2022. It is an increase of about 60% year-over-year. This is mainly due to the INR 55.7 crores contribution from the audio division.And the profit after tax for the standalone for the quarter ending June 30, 2023 stands at INR 9.3 crores compared to about INR 55.7 lakhs during quarter ending June 30, 2022, and that's a substantial jump. If it comes to the segment-wise performance; our Digital Marketing segment has contributed to about INR 1,593.49 crores during the current quarter and the Software division has contributed to INR 96.83 crores. The profit before tax of Digital Marketing segment stands at INR 445.49 crores, and the software division stands at INR 42.84 lakhs. Some of the key things that's driving this exceptional results is our innovation, which is the other core of our business.At the heart of our success is our unwavering commitment to explore new avenues to generate revenue. Quarter one saw the launch of our Audio Division, which have not only garnered positive feedback but also solidified our position. Our Innovative Solutions continue to provide advertisers and publishers with cutting-edge tools to optimize their campaigns and enhance their reach. And the strength of that is data-driven insights. And as you know, data is the backbone of our industry and our progress in harnessing data for actionable insights sets us apart. We have invested heavily in data analytics, allowing us to provide our clients with valuable insights into consumer behavior trends, campaign performance and so on.This data-driven approach has been instrumental in enhancing the effectiveness of our offerings. Speaking about challenges and opportunities, while we celebrate our success, we acknowledge the challenges that lie ahead. The ad tech landscape is dynamic and regulatory changes, technological shifts and global impacts can definitely impact our operations. However, our adaptable business model and agile workforce are [ well-equipped ] to respond to these challenges and convert them to -- convert them into opportunities for growth. For the outlook -- the coming quarters -- as we look ahead to the coming quarters, our outlook remains positive as we start exploring our options to expand our footprint in APAC region.We believe that we will be able to capitalize on emerging trends, expand our market presence in the APAC region and deliver even greater value to our clients and stakeholders. First commitment to innovation, customer centricity and global collaboration will continue to drive our success. To conclude, I want to express my gratitude to our talented teams around the world whose dedication and hard work have bought us to the outstanding quarter one results. Our achievements are a testament to their expertise and unwavering commitment.I now hand over the call to Mr. Peshwa to walk you through our company strategy and market outlook. Thank you, everyone. Over to you, Mr. Peshwa.

[Peshwa Acharya, executive]

Yeah. Thank you, Mr. Raju. Good afternoon, everyone. I extend my heartfelt appreciation for each of your engagement and dedication in joining our investor call -- in our investor call today. Let me first begin by extending my gratitude to Mr. Raju, our CFO, for guiding us meticulously through the financials. By now, you would have explored the complex numerical details and impressive accomplishments of our company in the present year. I want to take a moment to convey my profound thanks to every member of our team whose unwavering dedication has played a pivotal role in attending this level of success. Today, my intention is to delve a little deeper into some of the key strategies that have propelled this performance, you may say exceptional performance.Moreover, I'll provide you with insights into our forthcoming strategic direction. Throughout the preceding quarter, we have diligently executed a variety of strategic endeavors that have played a role in advancing our goal setting and fostering growth. In a testament to our achievements, the combined revenue and PAT for the first quarter this year have demonstrated an impressive year-on-year quarter-wise increase of 14.16% and 15.96%, respectively, for your organization. Now I am articulating some of the strategies that are helping our company to grow along with the combined efforts of our team. Number one, continuing to build client reach across geographies -- this implies both increasing the clients as well as getting a higher wallet share of our clients' business.And as the client satisfaction increases, both of these will happen. Second, the introduction of many of our new products, which we have done over the years, including audio ads, which we have done recently, that has also helped us. And as many of you would know that the audio ad market is projected to reach around $13 billion in the next few years with an estimated 1.6 billion listeners. So some of our new product promises are not just innovation, but we believe a very profitable future, including audio ads and others. So this is number two. Number three, our company is gearing up to appoint Chief AI Officer -- someone who will be at the helm of propelling our artificial intelligence endeavors to new heights.This is especially important when we are talking of our forays in the area of Generative AI. Number four, constantly adapting to new trends and embracing the ongoing changes in the mix of performance versus CPM ads, anyone who's in digital marketing, understand and appreciate this. We also want to put on record that we have added three new ad agencies, 12 new direct advertisers and four newspaper relationships for the Blocal Exchange. Sorry I think there was some problem. I'll just repeat. We have added three new ad agencies, 12 new direct advertisers and four new newspaper relationships in our Blocal Exchange who have a substantial reach and network.The next important point, which I think has a little bit already been told in our previous investor communication that we believe Asia-Pacific, APAC will be an epicenter of future growth. The numbers clearly say that it is reaching around 40% of the global GDP. And to enhance our presence in the Asia-Pacific region, we would be establishing offices in some of the vital hubs, possibly KL and Hong Kong and forging strategic partnerships with compatible associates. One example of that is our collaboration of LoopMe, which we have already told. Next point, which we believe is that Strategic Long-Range Planning. This component will really help us to provide a roadmap to reach new heights and overcome future challenges.And in this SLRP process, we will actually have smart goals built in. So your company plans to venture into areas of artificial intelligence, especially generative AI and quantum computing, driving innovation and value-creation in the overall digital marketing and advertising space. APAC expansion opportunities, as I have previously mentioned. And we would also consider vertical integration by inorganic growth or partnering with companies in their respective industry chains. Let me talk a little bit more of generative AI. We aim to make the most of generative AI, a concept which many of you would be completely acquainted with through the mass products like ChatGPT, Midjourney, and DALL-E and others.Generative AI encompasses the artificial intelligence, utilizing creative methods to produce diverse forms of content, text, images, audio, synthetic data. So this strategy will enable us to maintain a leading position in the ever-evolving tech field. So this is one of our clear stated objectives, and we will consistently explore potential organic, inorganic and actually higher opportunities in this realm of generative AI for our future ventures. And finally, LoopMe the recent successful partnership announced with LoopMe, according to me marks a significant milestone for growth of our group.So I would like to thank all of you for your attention. Let's continue to work towards a successful and profitable future for our Group, Brightcom Group. With this, I would like to hand you back to our host and [indiscernible]. Thanks to all of you. Thank you.

[Singaraju Lakshmi Raju, executive]

We now hand it over to Mr. Suresh.

[Muthukuru Reddy, executive]

So just let me give you a quick very short talk on exactly where the kind of the direction of the company is, then we can go to Q&A. So first of all, thank you all for being on the call today. It's my honor and pleasure to welcome you to this results call of Q1 '23-'24. And I'd like to thank our CFO, Mr. Raju and our President of Strategy, Mr. Peshwa for setting the whole framework up so that I don't have to say much. They have covered everything that needs to be said. So I'd just like to if I can highlight some points. And before I do that, I would like to express my heartfelt gratitude to all of you for your continued support and trust that those are very invaluable for us.I'll just underscore some accomplishments and talk a little bit of future ambitions and then go straight to questions. I think there's a lot of queries that have come up and I think there's lot of interest talking more. So in that interest, we have increased the call by 15 minutes to cover more questions. Just [indiscernible] my part also quite short. Just I'll do some key things I wanted to talk about. Our recent accomplishments [Technical Difficulty] of what the company is doing, if you take a look at Q1, consolidated revenue, INR 1,690 crores about 14.16% increase compared to last year, same quarter [indiscernible] a little below the guidance that we gave in the beginning of the year. But the PAT has come above the guidance.That also gives you a sense on improvement of efficiency. That said, there's the [Technical Difficulty] in terms of [indiscernible]. There has been a few developments. I think there are a couple of things that happened in the marketplace is MediaMath, there was one large player [Technical Difficulty] have shut down and there are some challenges with that. But [Technical Difficulty] to address that, similarly, there are a few other happenings in the marketplace, which were also addressed well. So we came fairly close in terms of the top line. So this is important. But that said I still believe this is a very, very good performance compared to the last year's same quarter.Another very significant point I want to point out is the standalone financials. If you look at the standalone financials year-on-year, there is a 60% jump. It's not that the software business has gone up by 60%. We've added the EBITDA revenue fee into the standalone total revenue into our brands. And that added about INR 55.7 crores to the topline and the PAT went from less than INR 1 crore last quarter or the last year same quarter, INR 55 lakh to INR 9.3 crores. It includes about INR 4 crores of dividends. So about INR 5-odd-crores came from audio advertising. So approximately we remain around 10% which is just beginning to start. So we'll see how it plays out.There have been questions regarding this on how it will play out and such. We are still not in a position to give you a clear answer, how it will come out. But I believe it would [Technical Difficulty] nicely for an increase in that portion. Then coming to financial guidance; our growth trajectory is backed by operational strategy. This is looking at revenue generation and cost optimization. So we always look at how we can continuously refine the financial models to change in market dynamics and make sure the profitability [indiscernible]. This has been the general plan through which we always fall in the range that we have [indiscernible].So our experience with this shortfall that we saw, we actually use this opportunity to improve efficiency. So now the opportunity -- so we are very optimistic in meeting what we have given as a guidance. That was one quarter aberration in the marketplace. So we see that will get back on track and make up [indiscernible] we fell short. Few other developments that I'd like to bring to your notice. There is auditor [indiscernible] that is happening, which we've already announced to the market. So we are in the process of appointing a new auditor. We're trying to find a suitable auditor to ensure robustness. We got a lot of feedback on what kind of auditor we should get and we are very happy with the kind of environment and ownership that you all up taking and making sure we do the right things. So we will do what's best and we will continue to use for improving our -- the perception of the company going forward.We'll inform as soon as this appointment is done. We will give a 30-day period after the announcement. So we are -- but we are trying to do as soon as we can. Then regarding there have been a few -- quite a few concerns regarding the company valuation, share price and such. We don't comment on it. But that said I would like to just talk about some points that we didn't look at. We are looking at analyzing the factors influencing the share price as we believe in the financing as well. So we like to see what's going on, what is pausing this fluctuation? And we're trying to figure out [indiscernible] to make sure the intrinsic strength of our business comes out and ensuring that any faulty players are addressed.So this is what is one initiative that we're looking at in this coming quarter. This is broadly some of the points. I'll talk more, but let me go to the queue, a lot of questions that have come, I'll go straight to the questions that I have here. Then I can take questions from the caller side. The question regarding, again, again, this is about valuation with this kind of revenues and perhaps we should be seeing a much bigger market cap. We are currently between [ INR 5,000-odd-crores ] market caps is about a [indiscernible] multiple of about INR 3.66 crores. And obviously, this is not what we want to see. So there are quite a few things that we have to do and we will do.We do have new -- I'm sure you'll appreciate we are just coming out of lot of disturbances both on the [ office ] side and other side that we are going to address. So that -- kindly give us some time to ensure that we will be completely on top of [Technical Difficulty] going forward. So the important thing, again, it's been brought up a number of times, [Technical Difficulty] company. So we are making sure that this has to be sort of the primary focus [indiscernible] for the company. And we may bring in [indiscernible] team to address all the issues and lapses that have happened or happening obviously have to be addressed. So we are looking at that. And you will be the first to know as these are implemented.Coming to -- I believe some of the same points related to what we have committed and where we are lagging and how we should address that. So we understand [Technical Difficulty] has to be done and improving the whole government structure. These are things I believe will help improve the perception if you translate [Technical Difficulty] so this is the effort that the company has taken up and you would see the results going forward. Then comes to the next question. Yeah, revenue shortfall, I think I talked about it on the [Technical Difficulty], revenues and EBITDA [Technical Difficulty] audio business. Approximately INR 55 crores came from the audio team and about INR 5-odd-crores PAT. So you can make [Technical Difficulty] somewhere.How can [Technical Difficulty] next question related to [Technical Difficulty] has it been submitted to the regulator? So the process of audit committee and review plus [Technical Difficulty] in the work. And we have time till 26, I believe. But we have [Technical Difficulty] to get this out as soon as possible, and we should be -- we should be -- we will inform the market once that is done. Then there's another question regarding -- yeah, there's a couple of questions regarding MediaMint -- you have made a payment, cash payment or either a stock demand [Technical Difficulty] taking time and such. There was no cash paid to MediaMint. It was -- only the stocks were assigned to the seller.As I said, the stock have been locked, and we are working on the process of [Technical Difficulty] but still a little more time given a lot of things that are happening within the company as well. But there's nothing to be worried. Rest assured the shares are not going to go anywhere. [Technical Difficulty] This is my guarantee to you. There's no problem on that front. And yeah, a question on why are we not bringing in more individual and institutional big, big investors. Yes, yes, this is also another area that needs attention, and we will absolutely start working on that. We have a few [Technical Difficulty] are all set on that. The management has opportunity to go towards marketing the company, marketing the brand to begin a -- get a larger group of investment [Technical Difficulty] in the large investors [Technical Difficulty].Then let me see if there any other questions I can answer. I think there are questions about corporate governance is something I covered. Yeah, then there's a question regarding Quantum lab. Where do we stand? Why there is no further announcement? So the lab has been set up and we are working with Qulabz on it. When there is something significant or substantial we'll definitely announce so it's a work in progress. Nothing much to announce on that -- work is going back. There is also a question regarding why the promoter and the management personnel are not giving as many interviews to the market. It's just that [Technical Difficulty] of the company that we decided to get everything [Technical Difficulty] before we get back and start off into the media [Technical Difficulty].So at this point, we will talk to them [Technical Difficulty] but we are not actively seeking anything. [Technical Difficulty] another question that I can answer. Asia-Pacific region. Yeah. I think Peshwa articulated very well about what we are thinking of today. But said, are there any specific items that you are doing, I think [Technical Difficulty]. Yes, you will see the announcement hopefully in a couple of quarters we'll start with the activity on that front. Then MediaMath, I think that [Technical Difficulty]. There was a bankruptcy of a company called MediaMath that [Technical Difficulty] so important in varying environments of the economy.So we feel that MediaMath is unfortunate. It happened to a very good company. We have particular relationships with MediaMath. We were able to [Technical Difficulty] and able to cover [Technical Difficulty] jump into action [Technical Difficulty]. So that's -- this area of MediaMath. Then some norm settlement or is it not getting closed in spite of reassurance [Technical Difficulty] I think that has become our core point. Again, and give us a few quarters, we'll get back to it. I think when we sit down with the bank [Technical Difficulty] and make sure everything else [Technical Difficulty]. That's where we stand and we'll inform you as soon as [Technical Difficulty].

[Singaraju Lakshmi Raju, executive]

Sorry to interrupt you, your voice is [Technical Difficulty] in between [Technical Difficulty] a bit louder to the mic.

[Muthukuru Reddy, executive]

Yeah. So that's a couple of main points I covered. So I'm open to taking any questions. So the operator, if you can take questions, please.

[Operator]

[Operator Instructions] First question comes from [ Bhupender Singh ] an Individual Investor.

[Bhupender Singh]

Yeah. My first question is regarding the progress of -- yeah, my first question is regarding the progress of SEBI's showcase notice and the appointment of new auditors -- regarding auditors, you have already mentioned that it is in the progress and all. But we -- my request is that rather our request is that the Big Four auditor should be taken on board this time, at least being a sector market leader, we must show to the other companies that by appointing a Big Four auditors that will be a bit savior to the company.

[Muthukuru Reddy, executive]

Yes sir, we will try, we will try. Because given the timelines [Technical Difficulty], we will try to get the best auditor right now and then we look at -- definitely look at Big Four as an option.

[Bhupender Singh]

And the progress about the showcase notice of SEBI, any -- what's the latest about that?

[Muthukuru Reddy, executive]

I would rather not talk about it right now because it's kind of sub-judicial of sort. I don't mind saying -- talking about it, but I just don't want to invite trouble. So that's the reason we have been quiet about that. There's no other reason.

[Bhupender Singh]

Okay. So last time also, I've asked regarding this buyback of share by the company. And you said that this is presently not in your plan and all. And you said that in case of requirement, some amount you made going for the buyback. So can you -- now since there is a change of scenario or do you think if there is a change of scenario, would you like to go in for the buyback? It's a great demand from the investor side also?

[Muthukuru Reddy, executive]

Yes, sir. As soon as we have taken a decision on that, we'll absolutely inform. But as of now, no decision has been taken in that direction, yet.

[Bhupender Singh]

And a similar question was regarding the ESOP, the price -- stock of ownership plan. Any plan to buy because more than one year, it has been formed -- okay. Sir, what is the latest progress about the Daum settlement -- it's going on for -- lingering on for the years together now. Every quarter, the same answer is there from your side.

[Muthukuru Reddy, executive]

We have put that on back burner for a couple of quarters as we requested the time because of all the pressures that we are having some various directions. So we have put on that back burner. Once it [indiscernible] into the main thing, we'll complete it. So right now I think I mentioned that in the [Technical Difficulty].

[Bhupender Singh]

And another old issue is there regarding the consolidation of U.S. subsidiaries and the NASDAQ listing, if it is there in your plan now?

[Muthukuru Reddy, executive]

Consolidation in the works for sure. But again, a lot of things are happening and we must address these things. We will go back. It has to be done. There's no choice. That is the smartest way to do it. We believe it. We continue to believe that's the right way to go. It will happen.

[Bhupender Singh]

So the worrisome point is regarding every time, the numbers are very good. We congratulate you for that. We are always happy by getting the numbers of all quarters and all. My question is that in spite of that, the PE valuations are very low. [Foreign Language] And the retail investors are always worried.

[Muthukuru Reddy, executive]

I agree. I mean but you do have to give credit to the turnaround after a very big impact turned around and I think it went from what -- went all the way down to INR 9 because of a lot of unexpected situations that we had to face. But it did turn around and go up. And I think it will stabilize and eventually re-rating has to happen. We have seen that in the past. We believe as long as your fundamentals are right -- short-term maybe some issues but I think long-term we should be fine. I think some of the biggest blue chips in the world have gone through this kind of phases. We are a smaller company. We would -- we will come through, that's what is answer.

[Bhupender Singh]

Yeah, I'm very sure, sir, we are eagerly waiting with that. And my last question, sir, very small. A lot of people are representing regarding the non-deposit of TDS in the -- with the income tax authorities. It's a very small point.

[Muthukuru Reddy, executive]

I think that's done. There's no -- there was some issue -- technical snag in the system that we had to go and -- took a little time. We apologize for that, again, it's [indiscernible] due to all the other activities that have happened. I know it will never happen. But what you have done -- and then I think now it is sorted. If there is anybody who have that issue, kindly reach out to us, we will see what [Technical Difficulty] now the system is in place. There should be nobody [Technical Difficulty]. Let us know. We will look at it.

[Bhupender Singh]

Sir, in spite of your assurance every time that the corporate governance will improve but on ground, we don't find something substantial because some issues remains like that only. So I hope the company will improve the corporate governance issue on top. Thank you very much.

[Operator]

Next question comes from [ Raghav Kumar ], an Individual Investor.

[Raghav Kumar]

Yeah, congratulations on the results, sir. So I just had one question like last time, we had given INR 0.30 of dividend when our net profits were around INR 91 crores. And this time, it has raised to INR 1,370 crores, and we had reduced it from INR 0.30 to INR 0.10. I just want to understand that reasonal and also we had set some dividend distribution policy, where we have compared ourselves with Apple, [indiscernible], etcetera, and we said we will stick to that 7% mark and also posted that policy on the flip side, etcetera. But we are not able to follow that or keep up that dividend. So I was expecting we would increase our dividend from INR 0.30 to INR 0.50 or INR 1 and go beyond that because our free cash flow, net profits have been increasing very drastically -- but if you take we are actually taking an opposite trajectory. Just want to understand why is it?

[Muthukuru Reddy, executive]

Basically, see, when we announced the INR 0.30 nobody expected that [Technical Difficulty] was distributed. And I think it is since the markets were strong, things were all looking very good. And so we went ahead and did it. And we -- see we also want to consider any environmental situation before we take these calls. So hence, this time, we decided to keep it a little low and see if things are stable and if there are no issues with respect to making sure we meet our guidance, making sure we meet growth rate. Because also growth rate of the business is important because that will eventually turn into the value of the company, value of the investors' stock.So it's important that we don't compromise that in an effort to -- without [Technical Difficulty]. So that was the thinking -- so we had this [Technical Difficulty] and we decided to go with INR 0.10 this time. And so this little aberration this one year we'll have to live with because of uncertain markets when we actually were [Technical Difficulty]. So once the markets are more -- once we have a better sense and once we are also in a more stable state in terms of a lot of things with respect to systems and everything that we are trying to put in place, I think we should be in a stronger position to take this suggestion we made last year and implement it. So main reason is we just wanted to conserve a little bit.I know it's not [Technical Difficulty] but given that we were also interested in increasing the standalone financials that is also another point. We needed to have enough standalone to be able to [Technical Difficulty] so this additional induction of audio advertising [Technical Difficulty] to increase the standalone results and standalone size so that we should be in a position to give better dividends. These are some of the considerations with which we could not give INR 0.30 or above. So this time we have [Technical Difficulty].

[Raghav Kumar]

Sir, the majority of the investors have the concern like for the last 6 to 7 years, we have been having consistently good profit numbers of above INR 500 crores. Now we have reached INR 1,000 crores, INR 1,400 crores. And next year, we would be hitting around INR 1,650 crores as projected. But for the individual retail investors, there has been no value addition, either in terms of very good dividends or buybacks.And like we are expecting the market will appreciate our growth, and it will actually improve the share price. But it's -- so just see, looking at the profits, the market doesn't seem to appreciate our growth. So what they are expecting from us is to see the growth in reality where the retail investors and majority of the investors are awarded either in terms of good buybacks or good dividends. So how does the market believe like we are making so much profits and it adds value to all of the investors who have stayed for a very long time, more than 6 to 8 years.

[Muthukuru Reddy, executive]

So yes, yeah. So see again [Technical Difficulty] I don't want to restate what I just said. The important thing is to sustain and grow the business, which will translate into value of the business. So we have taken that direction that there are companies in the world which don't [Technical Difficulty] shareholders have benefited. And if you look at our 6, 7 years ago, our market cap was almost next to nothing, and I think people have benefited. And in the shorter term, if you look at last [indiscernible], it has gone up and down but still it's way beyond where it was at that time so in terms of value -- retail investors who have been in that -- have definitely seen some value. And I believe even now, given the current PE ratio, investors will scale [Technical Difficulty] will see very [indiscernible] value in the [Technical Difficulty] business. So I think that's much more satisfying is that not more by doing that as opposed to taking the money out [Technical Difficulty] under pressure. So we just want to do the right thing, and that is the thinking, there is no other point here.

[Raghav Kumar]

Okay. So in that aspect, like right now, we are going to appoint our new Indian auditors as the current auditors have resigned. At least, can we consider the Big Four auditors to be appointed in India? So what I'm thinking, how can we instill the faith in the market so that the value gets added, we just about -- do we just keep on talking that value will get automatically added to our stock.But unless we take these kind of measures, which make the market to believe then how it's going to automatically happen was my real concern. So if you are going to appoint one of the Big Four auditor in India, so that will be a very big turning point or starting point to make the markets believe like, okay, everything is going right at this company and that will automatically bring in all kind of investors, mutual funds, [indiscernible], etcetera or else like first option would be -- Big Four would be appreciated. If not, there are many big auditors in India or big names are there, can we look at them instead of appointing like Tier 4, Tier 5 kind of auditors who no one knows or understands their name in the country.

[Muthukuru Reddy, executive]

Yes. We are looking at all the options.

[Raghav Kumar]

Okay, sir. These were my concerns.

[Operator]

[Operator Instructions] Next question comes from [ Blessen George ], an Individual Investor.

[Blessen George]

Congrats, sir, for your excellent Q1 results. Three quick questions. One is what is the nature of the engagement with LoopMe? And what do you see as strategic advantages that comes from this partition specifically for Brightcom? That's one. Number two, I understand that online media solutions was audited by Ernst & Young. Given that we have had the current auditor move away, is it possible to engage with E&Y for the consolidated? Number three is, we have requested for 45 days extension to the [indiscernible] reply. Is it possible to give -- like, could you give us your expectation on the timelines for a resolution?

[Muthukuru Reddy, executive]

I missed the first question. Can you please repeat the first question?

[Blessen George]

So I was asking about the nature of the engagement -- of your engagement with LoopMe. What are the strategic advantages that Brightcom could leverage? How important is this partnership?

[Muthukuru Reddy, executive]

So one is LoopMe. The second one is [Technical Difficulty]. The second question was what, sorry? Can you repeat the second one?

[Blessen George]

About Ernst & Young, Online Media Solutions being currently audited by Ernst & Young. Is it possible to engage the consolidated with Ernst & Young?

[Muthukuru Reddy, executive]

And third one is regarding the [ FCA ], regarding the 45-day extension.

[Blessen George]

Yes, exactly. And your expectation, sir -- expectations on the [Technical Difficulty].

[Muthukuru Reddy, executive]

Let me see how I can answer that. Okay, engagement of LoopMe. See, what has happened is -- after December 1, the whole ChatGPT explosion and world has not been the same. Every business and every tech company is now trying to do an AI implementation. So in this rat race of implementing AI [Technical Difficulty] maximum benefit to a business some players got ahead of others. LoopMe was one of them in terms of implementing AI for digital advertisers. So they have done a fantastic job. And we have also -- we are also working on implementing our AI in our system, but they have been ahead of everybody in the marketplace.So we felt it makes sense to collaborate with them because we get access, it's like a large, huge, large partner you can have, where our network size gets larger. Let me explain a little bit here. I may get a little technical. But the point is, if you have an advertising network, the size of your revenue and the size of your profits and the size of the kind of advertisers and publishers have come to you, depends upon your network sites, meaning how many impressions that pass through your network, whether your own or your [indiscernible]. So bringing somebody like LoopMe enhances the network value [Technical Difficulty], plus brings the capability of [Technical Difficulty] AI-based advertising. So this is the core advantage of shaking hands with them so that is the fundamental idea.I don't want to get into the details of who gets what and all that, that is -- I mean that is between the company and LoopMe and [Technical Difficulty] confidential. But it will help us increase our revenue, it will help us sell our product set more effectively because of [Technical Difficulty]. That is the --- I'll stop with that. Coming to E&Y, yeah, E&Y or same person, I think everybody is talking about what are you building now, Big Four or things like that. There are practical consideration one needs to consider given a short time that we have on signing of people. So we are doing our best to get the best auditor we can. And definitely, we will try to do justice to the expectations there.And so E&Y specifically being only the Israeli entity right now, whereas we are looking at Indian parent plus the consolidation. So the difference is -- completely different set of people. So it will not help having a relationship with E&Y in [Technical Difficulty]. It's completely different in that sense. So that is the business details of how that will work. Now coming to the audit committee -- like I said, this is kind of subsidies, I don't want to talk too much more than I'm allowed to because this is the committee -- audit committee. I'm not part of the committee.The committee [Technical Difficulty] present information. The audit committee is looking at all the things that have been -- for this given directions to examine and then once [Technical Difficulty] auditor, the company [Technical Difficulty]. So I think work is in progress. It is not a company, it's not that -- it is the audit committee's job and they are doing a very good job at it. Once it is done, it will be sent and we will take permission to inform the market on that. That's broadly [Technical Difficulty]. I hope that satisfies you. If not, please ask me something else.

[Blessen George]

That makes sense. Just quickly on the last point. Would it -- would you expect it to take more than a year. Take more than a year, a resolution to this show cause notice.

[Muthukuru Reddy, executive]

I don't know. I cannot no [Technical Difficulty] -- we cannot take anything. No, we are doing everything we can from the company side, and we have actually stopped other initiatives to focus on ensuring we meet the regulatory obligations. So right now, that is the -- most important right now. So in terms of management attention, we're doing everything we can to address that first.

[Peshwa Acharya, executive]

Suresh, it is Peshwa. Suresh, you might have to speak a bit closer to this thing. [Technical Difficulty] No, I got feedback from DSNL so if you can?

[Operator]

Next question comes from [ Prakash Kumar ], an Individual Investor.

[Prakash Kumar]

Yeah. Yeah. In the interest of time for other investors, I'll be quick with my queries. So I have two queries. The first one is with respect to the strategic planning, one of the pillars you're talking about the brand building investment. Okay. So no, my query is -- so what are the concrete steps we are going to take to actually cover the basic awareness about the asset quality for the investor community? Like can we increase the witness about the business, what kind of services, what kind of products we sell to the publishers or whether we are in the SSP, DSP, publish a partnership, what kind of contract measures are there? Secondly -- no, we have 16 subsidiaries. So apart from the OMS and maybe one other subsidiary, I don't think anybody is aware about the other 14 subsidiaries.We do not have any basic information about those subsidiaries. Can we cover at least the basic details about those subsidiaries in the Investor Presentations? My idea about -- my idea behind these two things -- just let me allow me to complete this first question. The idea behind this -- covering the basic DPS on the products and sees, SSP, DSP, what kind of services we are in and the subsidiary details, no, it will increase the awareness of the people about the Brightcom Group, basic awareness to the investors. So what kind of -- what are the levers for the revenue you are talking about, the INR 1,700 crores we clocked in quarter one, right?Second is, can we have more detail -- in the second part -- same investor communication part, can we have more detailing for the annual reporting? Can we have -- in the schedules, can we talk more about what kind of the advances we have given to this INR 1,400 crores, those INR 3,000 crores receivables are there, what is the aging of those receivables? How old are those receivables? Are they old, more than 6 months? Are they old, more than one year? No, we do not have any basic understanding about those kind of outstanding -- those kind of working capital, which are stuck. We understand it's a very capital-intensive industry. But as is the basic awareness in the schedules we can cover in the Annual Report [ atlas ].So idea behind this whole communication part is, no, it will definitely improve the awareness of the basics of the company, the subsidiaries, what kind of services they provide, they provide the back-end services to the front-end business of the company or they have their own set of customers, right? So this is the first one. The second one is you just talked -- one of the previous investors he talked about the consultation of overseas businesses. If I remember correctly, you also had talked about this consolidation quite a number of times in previous quarter.In fact, if I go a little bit long back in 2020, there was a Board approval for this restructuring of all the business in the U.S. and then finally, restrict them. So my question is -- my specific questions there. As I understand, [indiscernible] will be -- will be subscribing to the 100% shares of that no, that consolidated entity, which will be listed in the U.S., right? So if you go for listing -- so I just -- I'm interested in the ballpark number, what kind of equity dilution in that subsidiary will be happening? Just a ballpark number, maybe 20%, 30%, 40% or more than that, just a ballpark number will be good enough for me.Second is, in the second -- in the same question, part B, is any of the existing promoter entity in the BCG group, the India entity -- will any of the entity -- promoter entity will be also participating in that equity dilution, which will happen in the -- while listing of the subsidiary business. Just a yes or no will be good enough, right? And -- so no, the third part is basically -- what is the expected time line we are looking for? Maybe a very high level number, like maybe 1.5 year or 2 years or 3 years will be good enough. So these are only two queries for you. I hope I am clear with my queries.

[Muthukuru Reddy, executive]

I'll cover all your points. So I think thank you for going in depth into all this thinking for us. Appreciate your thought process. Coming to the brand and annual reporting, let me first address that question. So in terms of the brand, there is one brand, which is Brightcom. Okay, that's where we call the parent as Brightcom Group. So Brightcom is the same brand that exists across all the locations. Yes, we do have VoloMP, which is e-mail marketing solution. And we have few other smaller brands like that. But in terms of digital advertising, digital marketing, that campaign management, that whole works -- is all under Brightcom. So it is all done under Brightcom and then we do have some other collaborations that we work like [indiscernible] like that.So brand-wise, that is consistent. Now your point is well-received in terms of we should elaborate more on all the subsidiaries. But in essence, they are all the front end of the same engine. So it may get monotonous of talking the same thing and everything [indiscernible] different locations. Definitely, the clients in each location are different. If I go into Argentina, I'll have Argentine advertisers, Argentinean publishers, some global publishers who have Argentinean traffic. So that is the mix. So we will try to explain that more in our next presentation. I think your point is well received. I think you should.

[Prakash Kumar]

With your permission, I would like to interrupt here, if you allow? Yeah. See, I think I was not clear in my query. I'll tell you one thing very, very clear. We have very good numbers. We are doing very good every quarter-on-quarter, year-on-year. But I'll tell you, out of those 5 lakh investors, if you ask them, if you ask them, how many of them actually understand whether we are in SSP or DSP, we are in digital media, what is the share of SSP to our revenue, what is the share of DSP? What is the share of [Technical Difficulty] nobody understand, trust me nobody understands.

[Muthukuru Reddy, executive]

No, no, just let me -- if you go into the presentation that we have given through 2020 till now -- you have to go into every detail has been explained very detail.

[Prakash Kumar]

Sureshji I have gone through all the [Technical Difficulty].

[Muthukuru Reddy, executive]

So that's my point. So all I'm trying to say is we cannot give all the details every time it gets -- we have been told that please keep it -- again, feedback from the shareholder community that some -- keep it pointed to that particular quarter. But your point taken, it's been a while since we have done that. We will do a very detailed presentation which will have the entire information. It's about time. We will do it. There's no [Technical Difficulty]. Everything you asked for is there. It is out there in the public domain.

[Prakash Kumar]

I have gone through -- I'm a loyal investor of BCG, I've gone through. Trust me, I go through your competitor. I go through the [Technical Difficulty]. Trust me, we are nowhere to the kind of content they covered in the Investor Presentation and the Annual Report. They cover the detailing as big as -- no, as large as possible it can go. You can -- just a suggestion from my side.

[Muthukuru Reddy, executive]

That's a very good point, we'll take that. For sure. And the second point is, yes, we've got the same feedback with respect to our annual reporting in terms of giving more details. So this particular Annual Report, we have the emphasis from both the Audit Committee and the management to make sure that a lot more clarity is given. So that is work in progress. You'll see a much more detailed Annual Report this year. That we're already working on, and I'm glad that you brought it up. You noticed and brought it up. So thank you so much. Then comes the second question was -- what was the second question [Technical Difficulty], sorry? Second question was about annual reporting, correct? Yeah.

[Prakash Kumar]

No, no, no. Second question was basically about this consolidation, the U.S. subsidiary -- you talked about the corporate [Technical Difficulty].

[Muthukuru Reddy, executive]

Right now, that initiative is on hold -- we just want to set things right -- everything we have properly before we go back to that. So that is on hold at this point. So your question regarding how long will it take -- whether [Technical Difficulty] all that we are talking about a good 1.5 years, 2 years before we do that. It's not going to happen [Technical Difficulty].

[Operator]

Next question comes from [ Iyan Bediyen ], an Individual Investor.

[Iyan Bediyen]

Good evening, everybody also joining the conference call. I just want to ask you a question regarding these joint ventures, which we've been doing right now. Like we initially thought of going -- acquiring the company, but now we're going to join with the ventures wherever possible. So is it best for the -- actually for the company because we are utilizing a capital in the best possible way instead of going and buying a company and having second thoughts why did we buy this company -- because a bird in hand is worth two in the bush.

[Operator]

I'm sorry to interrupt you, sir. I'm sorry to interrupt you. Just a moment, sir. Dear participant, kindly stay connected while we connect the management team back on the call. I welcome back the management team. Please go ahead, sir.

[Iyan Bediyen]

I also don't know where we got cut off. So I'll start from the beginning. Regarding these joint ventures, we are having right now with LoopMe and the other guys. So I just want to know, is it -- we had actually planned to acquire a couple of companies, which we changed our thoughts midway. So is it because we thought acquiring companies is not the forte because maybe we don't know what we are acquiring. And down the lane their technology may be obsolete and we may no longer require them? And our capital will go to waste because we've seen very good companies, acquiring companies and later on regretting the decision. So is this the reason we are going for joint ventures and partnership sort of thing because a bird in hand is worth two in the bush, like being cashed.

[Muthukuru Reddy, executive]

And let me -- can I explain this thought process? So I think you've -- in a very broad way covered the same point that we had made a few quarters ago when we were talking about new [indiscernible]. So fundamentally, if you -- we've done acquisitions, we've done a lot of acquisitions. And when you make an acquisition, you don't acquire best of technology. You don't acquire best people. You don't acquire best clients. This is a company. We buy the whole thing, which will add to you. So when we did acquisitions, for example, Ad Dynamics back in the day, it was the first acquisition as a small company had one. We were a back-end company, and we bought a company, which is a front-end company, which we didn't know anything about how it works.So it was also to learn how that works and give us an entry into that -- so there are two things. One was winning capability that the company does not exist, we are bringing in as a [indiscernible] strategy. Two is [Technical Difficulty] when we bought companies which are all over the South American region or whether they are in parts of Australia or Europe. So that is the reason when we bought OMS. So if we didn't do OMS, we wouldn't have [Technical Difficulty]. So that logic of this saying, we will lose technology. It's not that. More importantly, what is the fundamental thought process behind making that acquisition? So now we have a decent footprint, I'm not saying no to acquisitions right now. But we are going to pick and choose which will be a joint venture and which will be an acquisition.So when we do an acquisition that has to fill in something that we do not have -- and it's a changing landscape, if we can transition and we can actually build it for half the price, there is no reason for us to put that kind of money to buy somebody. So those calls are made fundamentally from understanding what is the right use of funds. So that is the logic behind taking the JV route, where we are working out -- we're going to contribute so much. And we already have a product that is working or a technology that is working. We work together. We give them our entire reach, which is our network and their technology.Together we make money. So then they get their share and we get our share. So that is the logic behind the JV strategy that we are adopting right now. Okay, we will still look at let us say, we want to get into China -- we don't have any presence in China right now. So if let's say you want to go -- we find a network which is Chinese, China based. And it has the strength to give us the big reach and understanding of how to operate in China because we did try in the past and we decided we pulled out because we are not successfully able to run that. So some of those things which we cannot do because we do not have, we try to do it through an acquisition. So it's a very long conversation. I don't want to take up the entire call on this -- but logic is what does it fit into, whether it is -- we are always evaluating [Technical Difficulty]?

[Iyan Bediyen]

My follow-up question would be, is that why we are not going in for a buyback or giving an extravagant dividend because you want to conserve cash for future maybe if you get a real good deal for those acquisitions is that the reason -- one of the reasons or is that the reason?

[Muthukuru Reddy, executive]

Yes, yes, yes. Yes. The idea here is we need to build a global brand to reckon it on a global scale. To do that, we need to have enough firepower when the right opportunity shows up. So that is the thinking, 100%.

[Iyan Bediyen]

So we are building a [Technical Difficulty]. And second, my actual question, I mean I know it's been answered, but I would -- you just put in a suggestion over here is to dedicating an experience person just to monitor or address the market capacity of the company. I mean, the guy, I would quote over here it takes a team to catch a thief. I don't want you to appoint a thief, but let's appoint a guy who is very savvy towards these market cap issues -- who understand who's buying, who's selling, who's manipulating the price. So if we do that, maybe this one agenda, you will -- one guy will cut out like 90% of your tension given the market cap issue.

[Muthukuru Reddy, executive]

Yeah. I think this will all gets sorted out and I'm not really not. [Technical Difficulty] I think if you all get buggered up together -- there has been a little -- you have to understand, there are a few things -- events that have happened. [Technical Difficulty]

[Iyan Bediyen]

I deserve a cake this time around because I think I'm in my 10th year. So 10th year, one decade anniversary should be -- one cake should be left for me and other investors also for [Technical Difficulty] with the company will get that.

[Muthukuru Reddy, executive]

Should we call it or do you have more questions.

[Operator]

No, sir.

[Muthukuru Reddy, executive]

Thank you very much. So again, I appreciate the time taken with all of you to attend this call. I hope you got the value for it. Thank you very much.

[Singaraju Lakshmi Raju, executive]

Thank you, everyone. Thank you.

[Operator]

Thank you, everyone. Ladies and gentlemen, this concludes the conference for today. Thank you for your participation and for using Door Sabha's conference call service. You may disconnect your lines now. Thank you, and have a good day.