Brightcom Group Limited (Formerly Lycos Internet) - Way to Digitalization

LYCOS INTERNET-BSE 532368 (YBRANT DIGITAL LIMITED) is a global information technology of digitalization and implementation and outsourcing services provider. The key verticals help to clients to maximize their business performance. Lycos provides end to end enterprise solution offerings and specializing in ERP Solution, Microsoft and open source systems development. Company has its corporate office located at Hyderabad and other centres located across USA, UK, UAE, SOUTH AFRICA AND OTHERS-TOTAL 24 COUNTRIES.

OFFERINGS:

* BUSINESS SOLUTIONS

* TECHNOLOGY

* OUTSOURCING

BUSINESS DIVISIONS:

1. LYCOS NETWORKS

2. LYCOS MOBILE

3. LYCOS FUSION

4. LYCOS MEDIA

5. SOFTWARE DIVISION

s

BUSINESS MODEL:

CUSTOMER-Brand/Portal------AD-agency-----Technology=Reach Provider (LYCOS INTERNET)----Publisher----Internet users

SHARE HOLDING:

47.625 cores of Equity.

* PROMOTER---39.13

* PUBLIC-60.87

1. INTITUTIONAL-20.83

2. BODIES-11.56

3. INDIVIDUAL-15%

4. OTHER ---24%

Lycos Internet

Previous Years >>

Consolidated Yearly Results


in Rs. Cr.

Mar '14

Mar '13

Mar '12

Mar '11

Mar '10

Net Sales/Income from operations

1,673.37

1,601.05

1,263.18

485.70

384.47

Other Operating Income

--

--

--

--

--

Total Income From Operations

1,673.37

1,601.05

1,263.18

485.70

384.47

EXPENDITURE

Consumption of Raw Materials

--

--

--

--

--

Purchase of Traded Goods

--

--

--

--

--

Increase/Decrease in Stocks

--

--

--

--

--

Power & Fuel

--

--

--

--

--

Employees Cost

127.75

1,175.03

1,013.35

393.31

308.12

Depreciation

68.83

26.03

16.76

5.83

4.81

Excise Duty

--

--

--

--

--

Admin. And Selling Expenses

--

--

--

--

--

R & D Expenses

--

--

--

--

--

Provisions And Contingencies

--

--

--

--

--

Exp. Capitalised

--

--

--

--

--

Other Expenses

1,178.47

319.35

12.08

12.67

15.92

P/L Before Other Inc., Int., Excpt. Items & Tax

298.32

80.63

220.99

73.89

55.62

Other Income

1.50

14.34

34.33

-0.13

-3.61

P/L Before Int., Excpt. Items & Tax

299.82

94.97

255.32

73.76

52.01

Interest

26.94

35.17

27.66

12.27

11.34

P/L Before Exceptional Items & Tax

272.87

59.80

227.67

61.49

40.68

Exceptional Items

--

--

--

--

--

P/L Before Tax

272.87

59.80

227.67

61.49

40.68

Tax

51.91

8.81

35.86

9.53

7.99

P/L After Tax from Ordinary Activities

220.96

50.99

191.80

51.97

32.68

Prior Year Adjustments

--

--

--

--

--

Extra Ordinary Items

--

--

--

--

--

Net Profit/(Loss) For the Period

220.96

50.99

191.80

51.97

32.68

Minority Interest

--

--

--

--

--

Share Of P/L Of Associates

--

--

--

--

--

Net P/L After M.I & Associates

220.96

50.99

191.80

51.97

32.68

Equity Share Capital

95.25

95.25

95.25

25.42

25.42

Reserves Excluding Revaluation Reserves

--

--

--

97.91

97.91

Equity Dividend Rate (%)

--

--

--

--

--

EPS Before Extra Ordinary

Basic EPS

4.64

1.07

4.03

20.44

12.86

Diluted EPS

4.64

1.07

4.03

20.44

12.86

EPS After Extra Ordinary

Basic EPS

4.64

1.07

4.03

20.44

12.86

Diluted EPS

4.64

1.07

4.03

20.44

12.86

Public Share Holding

No Of Shares (Crores)

28.36

27.87

27.66

1.15

0.89

Share Holding (%)

59.55

58.53

58.08

45.35

35.18

Promoters and Promoter Group Shareholding

a) Pledged/Encumbered

- Number of shares (Crores)

3.93

4.43

4.62

0.65

--

- Per. of shares (as a % of the total sh. of prom. and promoter group)

20.42

22.45

23.12

46.72

--

- Per. of shares (as a % of the total Share Cap. of the company)

8.26

9.31

9.69

25.54

--

b) Non-encumbered

- Number of shares (Crores)

15.33

15.32

15.35

0.74

--

- Per. of shares (as a % of the total sh. of prom. and promoter group)

79.58

77.55

76.88

53.28

--

- Per. of shares (as a % of the total Share Cap. of the company)

32.19

32.16

32.23

29.12

--

Notes

|201403

|201303

|201203

|201103

|201003

Source :Dion Global Solutions Limited

This data can be easily copy pasted into a Microsoft Excel sheet

Lycos Internet

Previous Years >>


in Rs. Cr.

Mar '14

Mar '13

Mar '12

Mar '11

Mar '10

Investment Valuation Ratios

Face Value

2.00

2.00

2.00

10.00

10.00

Dividend Per Share

--

--

--

--

--

Operating Profit Per Share (Rs)

7.71

2.24

4.99

30.27

23.78

Net Operating Profit Per Share (Rs)

35.14

33.62

26.52

183.84

151.22

Free Reserves Per Share (Rs)

--

--

--

56.57

38.41

Bonus in Equity Capital

--

--

--

--

--

Profitability Ratios

Operating Profit Margin(%)

21.94

6.66

18.82

16.46

15.72

Profit Before Interest And Tax Margin(%)

17.81

4.99

17.03

15.22

14.46

Gross Profit Margin(%)

17.82

5.03

17.49

15.21

14.47

Cash Profit Margin(%)

17.30

4.76

16.07

12.24

10.73

Adjusted Cash Margin(%)

17.30

4.76

16.07

12.32

10.73

Net Profit Margin(%)

13.19

3.15

14.78

10.98

8.49

Adjusted Net Profit Margin(%)

13.19

3.15

14.78

10.99

8.49

Return On Capital Employed(%)

23.25

7.81

22.75

23.88

22.02

Return On Net Worth(%)

19.06

4.91

21.42

30.31

26.51

Adjusted Return on Net Worth(%)

19.06

4.91

21.42

30.56

29.56

Return on Assets Excluding Revaluations

24.34

21.80

18.80

66.65

48.49

Return on Assets Including Revaluations

24.34

21.80

18.80

66.65

48.49

Return on Long Term Funds(%)

24.98

8.71

26.71

34.15

34.66

Source :Dion Global Solutions Limited

his data can be easily copy pasted into a Microsoft Excel sheet

Lycos Internet

Previous Years >>

Consolidated Nine Months


in Rs. Cr.

Dec '14

Dec '13

Dec '12

Dec '11

Dec '10

Net Sales/Income from operations

1,512.12

1,265.36

1,229.03

925.21

360.08

Other Operating Income

--

--

--

--

--

Total Income From Operations

1,512.12

1,265.36

1,229.03

925.21

360.08

EXPENDITURE

Consumption of Raw Materials

--

--

--

--

--

Purchase of Traded Goods

--

--

--

--

--

Increase/Decrease in Stocks

--

--

--

--

--

Power & Fuel

--

--

--

--

--

Employees Cost

72.56

104.84

520.54

396.83

292.51

Depreciation

26.72

22.70

17.83

12.33

4.38

Excise Duty

--

--

--

--

--

Admin. And Selling Expenses

--

--

--

--

--

R & D Expenses

--

--

--

--

--

Provisions And Contingencies

--

--

--

--

--

Exp. Capitalised

--

--

--

--

--

Other Expenses

1,003.44

899.63

461.24

345.41

10.04

P/L Before Other Inc., Int., Excpt. Items & Tax

409.40

238.18

229.42

170.64

53.14

Other Income

4.07

12.78

4.25

20.96

-0.21

P/L Before Int., Excpt. Items & Tax

413.47

250.95

233.67

191.60

52.93

Interest

19.57

25.20

26.25

19.59

8.99

P/L Before Exceptional Items & Tax

393.89

225.75

207.41

172.01

43.94

Exceptional Items

--

--

--

--

--

P/L Before Tax

393.89

225.75

207.41

172.01

43.94

Tax

129.01

39.93

37.24

22.40

5.58

P/L After Tax from Ordinary Activities

264.88

185.82

170.18

149.61

38.36

Prior Year Adjustments

--

--

--

--

--

Extra Ordinary Items

--

--

--

--

--

Net Profit/(Loss) For the Period

264.88

185.82

170.18

149.61

38.36

Minority Interest

--

--

--

--

--

Share Of P/L Of Associates

--

--

--

--

--

Net P/L After M.I & Associates

264.88

185.82

170.18

149.61

38.36

Equity Share Capital

95.25

95.25

95.25

95.25

25.42

Reserves Excluding Revaluation Reserves

--

--

--

--

--

Equity Dividend Rate (%)

--

--

--

--

--

EPS Before Extra Ordinary

Basic EPS

5.56

3.90

3.57

3.14

15.09

Diluted EPS

5.56

3.90

3.57

3.14

15.09

EPS After Extra Ordinary

Basic EPS

5.56

3.90

3.57

3.14

15.09

Diluted EPS

5.56

3.90

3.57

3.14

15.09

In nine months company has made profit of 264 cr and Eps is 5.5 against profit of 185cr. FULL YEAR Eps is expected is 7.5- to 8per share.

Next year guidance is 20-30 growth in top and profit. That will make the Eps around 10/-.Buy with target of 75-100.

DEVELOPMENT FACTORS:

1. Nse listing

2. International listing.

3. New product lauch-2 within 3 to 4 months.

See companyâs web site for detail.

INVITING COMMENTS FOR THIS SCRIPT.

NIRAJ PARIKH

Parikh38@gmail.com

185.82

Hey Niraj,

I picked up a few Lycos yesterday and today with 32.5rs avg. With the recent fall from 60 to 30…it finally looked a GREAT PICK provided the numbers are legit.

Anyways, I have taken a chance by believing that the numbers are legit. And if thats the case, then the stock surely has much better days ahead. Should head back to 60/share atleast.

Cheers

Neil

thanks for investments. you see cash flow has increased recently and paid debt of 150cr. that is a very good sign.

Company pays 0% dividend. The stock is operator driven. Last I checked their website (ybrantdigital.com ?) , I could not find their office addresses.

(I got in @ 34, luckily got out @67/- in 2 months and am never buying it again)

1 Like

There are number of red flags in the company’s business model and annual report. Let me raise a few:-

  1. A company earning 220 crore profit last year and not cared to share even 10% as dividends to shareholders.
  2. The Income statement shows Tax of 51 crores paid but when you look at Cash flow statements nowhere is the cash outflow to pay tax mentioned.
  3. In order to show that they don’t have enough cash what do they do they show currency fluctuation losses worth of 96 crore. Seriously when rupee depreciated considerably last year instead of gaining on currency fluctuation you made a loss and if the dangers are so much shouldn’t you be hedging
  4. They paid 10 cr to repay long term loan, 53 to repay other long term liability and 41 cr to repay Long term loans and advance which totals to 104 cr of liabilities being repaid as per cash flow statements. While 63 cr is repaid in long term liabilities in balance sheet the other 41 cr is used to pay current liabilities which is increasing at alarming rate each year.

Such superb accounting tricks. Show profits are growing and don’t pay cash because your statements shows no cash as you make losses on currency fluctuation and you need to repay Current Liabilities each year which is growing at alarming rate as well. (This year from 31 cr to 172 cr)
My biggest worry is that in last 2 years they have raised 654 crores from markets, so they might still have some cash left and thus pay a miniscule dividend which may make more investors believe that the income is real.

From last few years there standalone business is going down because they are moving to online business. Very clever indeed already it’s very difficult for investor to understand their business now there is almost no chance left.

Tax saving because shifting office to Cayman Islands .Really if it was that easy don’t you think every business in world wouldn’t have by now shifted their head office to Cayman Islands.

People pointing out that because India will became more digital in few years are making a big assumption that all business will automatically come to Lycos. It’s similar to saying because the average income in India is increasing each year every man in India is became wealthier compared to last year.

There is a reason it is trading at such low P/E despite fantastic CAGR in profits and business .See helios as an example. Does that mean the price will fall further? I am not sure about that because this is one the most amazing thing about stock markets which People forget all the time is to differentiate between luck and skill. Over short periods of time, you can do the wrong thing and make a lot of money and do the right thing and look like an idiot.

18 Likes

thanks for reply.
see first point. company has profit of 220cr which is used for paying debt. see annual report.
tax paid inform of tds. that is why not shown to cash flow.
company has taken loan of 654cr and started paying loanthe loan. see nef debt is just 150cr at the end of 2014.
now comapny has free cash flow of 225cr as management has indicated in feb15 call transcription- at the time of reulst.
I believe the management and story.

http://www.moneycontrol.com/india/stockpricequote/computers-software-medium-small/lycosinternet/LGS

Click ‘max’ on the chart in the link above, it’ll show the chart from year 2000. Check how many times it has spiked and then again got to say 1/5th from the top. Last year it dropped to 2.5 rupees from a top of 140/-.

I know this chart and study it .company’s fundamental is improving. see detail in call transcription of feb 2015. I have studied in detail of each quarter detail. company has paid tax of 129 cr in 2015 which is real. debt which is reducing is real.

If the company has FCF of 225 cr and net debt of only 150 cr then they should start paying dividends this year with the significant increase in dividends next year (like most IT companies do). If this happens this could lead to massive rerating

But looking at their history of the company my guess is they will hide the cash flow in form of either increase in working capital or huge capex or like last year huge forex loss. Would be interesting to see this years annual report. Good thing is they have finally listed on NSE. But I am on the other side where I don’t believe in management and the numbers at all

3 Likes

Interestingly LYCOS was worth 12.5 billion dollars and now just 34 million when Ybrant bought it :slight_smile: Isnt that itself amazing and tells you why its crazy to buy such a company.

From what i know it is well operated. Its at a market cap of 1250 cr :slight_smile:

Saw a lot of buy reports at 50-60 bucks to dump it to public. Avoid !!!

1 Like

Lycos was a good portal in the late 1990s. Competing with Yahoo, MSN and the likes. Today, not sure if they really have any business at all.

let us see Q4 RESULT AND Ddividend in AGM of 2015 and debt reduction in balance sheet.

how do you get the figure of 12.5 bullion?

@folks who are tracking Lycos:
Looking at the number of roller coaster rides(referring to the ups and downs in the graph), it might look tempting to think that, “this was a stock which was trading at 100 odd, wont it even get to 70 odd levels? I might double my money!” Stop the thought process there! :smile:

In my last many years of investing experience, I have learnt never to fall for such traps. If a stock can fall from 110 levels to 2-3 Rs, it means Mr Market doesn’t see value in this!. May be an operator driven stock(who knows!). I might really be missing something/or a golden opportunity here. But it is fine!. As Mr. Buffet says “Our mistakes are mistakes of omission and not mistakes of commission, we don’t regret making them”. It is ok to miss a golden run in a questionable investment, rather than to have invested into it and regret later!

For folks who have already invested in Lycos: Take a sheet of paper. Write the logic behind why you have entered into Lycos. Try to present it to some 10 folks and try to get their buy-in. And then you may decide further! (Folks who have read Beating the street by Peter Lynch would know where this piece of advice is coming from :slight_smile: )

Thanks,
Ravi S
Disc: Wont enter, unless Mr NRN takes over Lycos and runs this company :smile:

7 Likes

company started trading on NSE as promised by promoter on 6-5-2015.

Disclosure : Invested in Lycos

Just to clarify, here is the history of the company : There was a company called Lanco Global Systems (later renamed to LGS Global I think) which was a regular IT services company similar to most other Indian IT companies. This company was listed on BSE around year 2000 or so. In 2012, another company called Ybrant Digital, which is a company in the digital marketing space, reverse merged into LGS and thus got listed on BSE. The new combined entity was renamed Ybrant, and was again recently renamed to Lycos Internet, since it bought the original Lycos search engine and other web properties and they want to leverage the brand name.

So now Lycos has 2 divisions - one is the erstwhile software services division (1/3rd), which seems to be going down, and the other is the digital marketing division (2/3rd), which seems to be going up. So it is not right to look at the history of the company before 2012 because frankly that was a very different company.

Coming to the stock it certainly seems operator driven, since it regularly hits upper circuits, then reverses direction and regularly hits lower circuits and then back up again etc. This has been happening for quite a few months now. It had a steep fall right after brilliant Q3 results, which further points to some play. Because of frequent ups and downs the circuit limits got changed from 20% to 10% to now 5%.

However the fundamentals of the company look very strong, and IF the numbers are not fudged, then this is a steal at current price levels. Promoter risk is something which is always round the corner in Indian markets (company being based out of Hyderabad does not help!), but keeping that aside, I dont see much that is wrong with the company. Since the NSE listing it has been hitting upper circuit regularly.

2 Likes

Lycos Q4 and FY15 results are out and are quite good. Annual Consol revenue of Rs. 1957 crores and net profit of Rs. 342 crores against the previous year revenue of Rs.1673 crores and net profit of Rs. 220 crores respectively. The digital segment revenues grew by 23% and overall revenue growth is about 17% compared to last year. Debt levels have come down too. At EPS of 7.19 Rs per share, and current price of ~35, P/E is about 5 times. No dividend announcement though.

they are doing concoll today at 2:00PM

http://www.researchbytes.com/

I did attend the concall, could not find any red flags. Management sounds sincere in their efforts to improve the business and even take it forward with things like IOT etc. On dividend, it was clarified that the Board discussed it, but decided to use the cash for debt repayment rather than give dividend at this stage. This is high cost Indian debt (14-15%) hence the need to repay it asap. As and when the debt is paid off or is replaced with a lower cost foreign debt, they will look at giving the dividend.

A press conference is planned for 4th June to announce the launch of products under “Lycos Life” division. They plan to launch 1-2 products every six months. The first product seems to be a ‘wearable’ product.

I saw the financial statement in money control site which is saying the net profit for march 15 qtr as 1.64.Please clarify me if i am wrong.

Please see the uploaded image for financial statement.

courtesy-Moneycontrol…

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Disclosure-I am interested to invest but apprehensive about steep up & down of this stock.