Brightcom Group Limited (532368) Q3 FY2026 Earnings Call Transcript & Summary

Good evening, ladies and gentlemen. I am Rajesh, moderator for this conference. Welcome to Brightcom Group Investor Conference Call. The duration of the call will be an hour. Today, we have with us Mr. Suresh Reddy, Chairman and Managing Director; Mr. Raghu Allamsetty, Executive Director; and Mr. Ravindra Kondamuri, our Chief Financial Officer. [Operator Instructions] Please note that this conference is recorded. Before we go ahead with conference, Brightcom Group would like to mention that during the [indiscernible] call. Certain statements in this call reflecting Brightcom's future growth prospects are forward-looking statements, which may involve a number of risks and uncertainties that could cause results to differ materially from those in such forward-looking statements. The company does not undertake to update any forward-looking statements that may be made from time to time on or behalf of the company. Now I hand over the floor to Mr. Raghu, who will take forward with the call. Thank you, and over to you, sir.

Thank you, Mr. Rajesh. Thanks for that. Good evening, everybody. This is Raghu Allamsetty, and thank you for joining us this earnings conference call to discuss the financial results of the quarter and the 9 months ending of 31st December 2025. Before we begin, let me briefly outline how today's call will proceed. I will first present the financial highlights for the quarter. Therefore, our Chief Financial Officer will share his perspective on the financial oversight and reporting priorities going forward. The Chairman will then read a prepared statement from the Board level Process and Compliance Review Committee and provide operational updates. We will then open the floor for questions, which Mr. Rajesh shall moderate. Financial highlights. For the quarter ending 31st December 2025, the total income stood at INR 2,231.89 crores. The profit before tax was about INR 446.87 crores. Profit after tax was INR 310.60 crores. Basic earnings per share was INR 1.54. On a year-on-year basis, the revenue increased by 33.3%. Profit after tax increased by 27.5% with a total income of INR 2,231.89 crores, represents the second highest quarterly top line in the history of the company. For the 9 months ended 31st December 2025, the total income stood at a whopping INR 5,331.28 crores. Profit after tax stood at about INR 754.50 crores. The basic EPS was INR 3.74. Trailing 12 months EPS stands at around INR 4.33. The performance reflects the operating leverage and monetization efficiency across the platforms. I now invite our Chief Financial Officer, Mr. Ravindra Kondamuri, to share his perspective on the financial oversight and reporting priorities going forward. Here, I introduce Mr. Ravindra Kondamuri to take over.

Hi, gentlemen, can you hear me?

Yes, sir, we can hear you. Go ahead, sir.

Gentlemen, good evening. First of all, let me thank the Brightcom Group for inviting me as -- appoint me as a CFO. So let me start with my -- from a finance and governance standpoint. My focus going forward will be on strengthening 3 areas, 3 key areas. First, reporting, robustness, ensuring standardization across subsidiaries, consultation alignment and documentation [indiscernible]; second, internal control depth enhancing review mechanism, validation layers and structured workflows across finance and operations. Third, regulatory alignment, ensuring that all communications and submissions are structured, documentation-driven and fully compliant with applicable requirements. The objective is not short-term adjustment, but durable financial discipline. We will continue to enhance reporting clarity, process transparency and internal coordination. With that, I request the Chairman to continue with the Board level update and operational remarks. For this meeting, I think this is what is my plans. Thank you.

Thank you, Ravi. Thanks a lot. Thank you, everyone, for being on the call today. It's an important earnings call for all of us. Like Raghu mentioned, this is the second highest quarter ever in the history of the company. So we're very thankful to the team and the entire operations for doing a great job. That said, my speech, whatever my talk today is 2 parts. One is I'm going to read out a statement prepared by the PCR committee, which is basically a Board level process and compliance review subcommittee that was formed. I will not add any commentary beyond that statement. It's a statement from them directly to you. And then post that, I will talk about the operating details, just to keep things clean and simple.

Gentlemen, can I take a second?

Yes, please.

I just thought of saying thanks to Raghu Allamsetty for the introduction and star reading from a finance and governance. Thank you, Raghu. You can go ahead.

Yes, sure, sure. Yes. Yes, it was a nice introduction. No problem. Okay. Let me start with the statement prepared by the PCR committee, and then I'll move to the remaining talk. And post that, you guys can ask question and answers. So here's the statement. In January 2026, the Board constituted the Process and Compliance Review Committee as a dedicated Board-level oversight mechanism to examine internal processes, documentation standards and compliance alignment across the organization. The formation of this committee was part of a broader governance strengthening initiative under the Board to reinforce process discipline, documentation consistency and regulatory responsiveness. While committee's immediate scope included matters arising from certain interim orders in 2023 and 2024, its mandate extends beyond those specific matters to encompass ongoing review of internal controls, reporting frameworks and structured regulatory engagement. Based on the Board's assessment of its effectiveness and the importance of sustained oversight, the committee has institutionalized as a standing Board level subcommittee going forward. The committee operates under defined terms of reference approved by the Board and functions within the authority and oversight of the Board and its statutory committees. Its mandate includes reviewing and recommending enhancements to operational processes and internal controls, evaluating adequacy of documentation and reporting standards across subsidiaries, overseeing implementation of corrective and alignment measures approved by the Board, monitoring structured and coordinated communication with the regulators, which is very important, periodically reporting its observation and recommendation to the Board. As previously disclosed to the stock exchanges, pursuant to Board approvals, 6.67 crore equity shares held by 2 funds, LGOF and Kannakar have been canceled. This action formed part of a capital alignment measure undertaken to ensure consistency between issued capital and underlying records. In parallel, the committee has undertaken a phased and a structured review process involving reconciliation of internal transactional data, cross verification of supporting documentation, consolidation level review across subsidiaries, strengthening documentation trials and record management practices, preparation of structured record-based submissions addressing observations contained in the regulatory orders. A set of such structured report and submissions have been reviewed and approved by the Board and formally submitted to the regulator. These submissions are documentation-driven and intended to provide factual clarification supported by underlying records. The committee is meeting regularly and remains actively engaged in completing the review process in a structured and a milestone-oriented manner. The Board receives regular updates from the committee and exercises ongoing oversight to ensure process remains disciplined, documentation-driven and aligned with applicable regulatory requirements. Further material developments, if any, will be communicated through formal disclosures in accordance with applicable regulations. This concludes the subcommittee prepared statement. Any follow-up queries specific to this statement may be routed to the IR channel to ensure responses. That's so they remain with the formal disclosure and regulatory protocols. So with that, I'm done with the statement. Now coming to my part of the -- operational part of the talk. The financial and securities-related questions, et cetera, will all be addressed by the Executive Director and CFO after the -- after my talk. Operationally, I'll just focus on this right now. Business continues in the ordinary course. Client relationships have remained active. Delivery execution continues. Revenue pipelines remain engaged across geographies. This quarter reflects continuity of execution. As disclosed, the company recorded consolidated total income of INR 2,231.89 crores and PAT of INR 310.6 crores for the quarter ended 31st December 2025. From an operational standpoint, this indicates the business engine continues to function and thrive. During the quarter, senior leadership participated in CES Las Vegas 2026 and Pocket Gamer Connects London, maintaining global ecosystem engagements. The 100% fill solution has migrated from server side integration model, improving scalability and integration stability. Deployment continues across sales, pre-bid integration, oRTB, TAM and direct demand channels. Infrastructure strengthening and performance-led monetization enhancement remain ongoing. So end of the day, industry indicates a 4.9% increase in supply coverage in December, reflecting a platform reach. Our partnerships with Dailymotion advertising and HUMAN Security continue to strengthen the monetization depth and brand safety capabilities. The leadership strengthening during the quarter includes appointment of CFO and other senior roles. So we welcome Mr. Kondamuri on board. Internally, the focus remains on standardization across subsidiaries, documentation first execution, layered verification and mechanisms around that, process-driven discipline. That said, our operational priorities will remain on improving collection of receivables, improving monetization quality and improved discipline in reporting. So that said, operational continues -- operational continuity remains intact. I'll stop at that. I think the more interesting part would be how the Q&A would proceed today. So I hand it off to Rajesh. Would you coordinate the Q&A, please?

Sure, sir. Now let's go ahead with the Q&A. [Operator Instructions] So first, we have [ Mr. Bhagwan Krishna Paruchuri ] who has a question. Please go ahead, sir.

Me, actually being a small investor, I have only one simple question. See, we have been boosting that this is the second best quarter of performance. But when I see Street is not believing our numbers. So what are we going to do to make sure that Street believes these numbers? Because our EPS is you are saying INR 4 and PE is not even INR 3. So how are we going to make sure that everybody believes these numbers?

Okay. Who wants to take it? Should I go?

Mr. Suresh, please go ahead.

Yes. Sir, yes, you have a very valid point, and I'm 100% in agreement with you. See, what we can focus on, obviously, 2 parts to it. One part is operationally, we should continue to work. We cannot just be driven only by the Street. So kindly keep that in mind. So the focus remains on making sure operationally, company is reviving and doing things that had to be done. So that is what we are reporting to you. So there is no euphoria around that. We are just presenting facts as they are, okay? Now the point 2, we have gone through a turmoil. We're returning. We are doing a lot of things. Things are lining up. Irrespective of what you might say, things are changing, perception is changing. It's a process. So we just got -- there was a suspension. We came back. There was a lot of issues that have happened. And you will see that change, and this can only happen through a strong process. And of course, it is the responsibility of the management and the promoters to make sure that company is presented well, so we will do that. So that is the whole process that we are heading towards. So we urge you to stay a little more patient with this. We will come through for you.

Okay, sir. Next, we have [ Dr. Supreet Prabhu ]. Please go ahead.

Okay. Now Suresh garu, 3 straight questions to you. First is we know -- I mean, it's a common knowledge from -- among all the investors, among all the HNIs that the only reason the valuation is not got because of the audit of the subsidiaries is not clear, right? We are not getting the audited results, whereas every result, there is a comment from the local auditor that he has not seen the audited reports. So can we expect that FY '26, we will -- year-end FY '26, we will get to see the audited reports, one. And from FY '27 onwards, every quarter, we will get a proper audited -- I mean, at least a comment from the auditor saying that he has seen the audited report of the subsidiaries. That is question number one. Question 2 is what is the role of 44 Ventures as regards OMS? There is still confusion regarding that because Brightcom Compass being a proprietary of the OMS is being used by Target, ProgrammaticX and other companies under the umbrella of 44 Ventures. So we need to know what is the correlation between all of this. And third and last question is, in your annual report, you had given a very positive outlook that we may reach or surpass the FY '23 performance. But looking at the Q3 performance, though good, it is definitely not up to the standard that we had expected. Because looking at it, we feel that we may end FY '26 with a INR 1,000 crore deficit compared to FY '23 and maybe a INR 200 crore profit deficit compared to that. So do you think we will cover this up in the fourth quarter? That's all.

Okay. Thank you, sir. So your first question regarding the audited financials of the subsidiaries, yes, we've got a lot of queries on that. I don't think that is the only reason the stock price is having challenges. But that said, it's an important part, and we have a new auditor who is on board. He's processing things. There are things that statement-wise that have to be put in from a regulatory perspective and which is why he's putting more as a disclaimer. It doesn't mean he hasn't seen anything. It just means he hasn't spent enough time on going into detail and getting through it. So it will happen by the end of the year. We were hoping it will happen by third quarter. Unfortunately, we could not pull that together because we had to get the results out and a lot of things we could not make it happen. That said, you will see that done by the next quarter end. That is one thing. Your second question regarding, yes, Compass and usage of other -- see, Compass is our proprietary... [Technical Difficulty]

Sorry for the technical glitch. I think right now, we are open once again. Suresh sir, you can go ahead with the question.

Yes, yes. Yes, I don't know where I lost you all. I was answering Dr. Prabhu's questions regarding Compass. So bottom line is that it's a solution by us and others may be using it for which there is a payment done. And at the end of the day, what I think we should focus on is the overall use and overall revenue. I think it's too much intrusion into operational details if we try to micromanage at this level. That is my view. We will check anyway since the point came up through the investors. I've heard this before, and this is the feedback we've got. Third question regarding results. That was just regarding this quarter, we were hoping -- I just said we are hoping that it will cross, but it was a very good quarter in my view. You can see 33% increase in business compared to year-on-year last year. So I said it is looking so good. It may even cross the highest. I didn't say it is going to cross. So it was just anticipation. I think we came fairly close. I don't think that is that bad. And if you look at the whole year, we would be phenomenally above last year's performance. So anyway, so I don't want to be misquoted. So that is how I see it, sir. And I'm happy to answer your question on that. Dr. Prabhu, you're there?

I don't think so he's there. Okay. So we will go ahead with the next question. The next question is from Mr. Uday.

Can you hear me?

Yes, go ahead, sir.

So I just wanted to know what's the update on -- we were thinking of implementing a Big 4 auditor. I'm not sure if we have approached any Big 4 auditor. So that's on that. And no update has been still provided on the Defense division. So yes, I would like to know more things because earlier also, we had started a lot of things on HealthTech and agritech, but nothing substantial came out of this. So just wanted to know if defense, we are doing some great things over there or not.

Thank you, Mr. Uday. So first question is -- I lost a bunch of questions. So the first question is regarding what was it? Can you repeat? I lost train of thought there.

Yes. Big 4 auditor...

Yes, that is work in progress. See, what we wanted to do is have 4 divisions, I think I've mentioned in the past. There work is in progress, and there will be reputed auditors. I'm not saying exactly Big 4, but reputed auditors from across the world who will be managing all the 4, consolidation will happen at the parent level. So all the 4 will be -- and they will be all track and will be -- we'll look at revenues, profits entire thing will be broken down into 4 parts. And that work is very much in progress. So there is nothing much to report in between. Once it is done, we'll report back to you. So that is number one. Number 2, regarding, I think, defense. That is also going extremely well. We didn't have anything to report in this thing yet. It is just beginning of the year and a lot of things, the government is just coming back to work across the world, including the U.S. and India. So there are proposals that are being pushed through. And once we have anything substantial to report, we'll immediately report. Now your question regarding is it taken seriously? Yes, it is taken very seriously. This is going to be a big frontier for the company going forward. And we've had feedback saying that focus on what has happened as opposed to what will happen. So we have kind of kept ourselves quite on purpose, not talk too much about it until we have something to report. Otherwise, there are things that are happening every day on that. So I think we reported already that Maestro OS, the prototype has already been done and it's been presented to the clients. And it's still -- a lot of things are being put into the system. We're working with our partners across the border on how -- across the -- I mean, across the seas rather with the U.S.-based partner that we have and how to implement it and all that. So all that good work is happening, but it is just work in progress. So we don't want to report until there is a milestone to report. And it's clearly happening as we speak. Any other questions, Mr. Uday?

Hope we sort out a lot of things, which we are planning to do and best of luck, sir.

Thank you, sir. Thank you very much. Appreciate that. Thanks a lot.

Next question is from [ Mr. Sharad Satpal ]. Please go ahead.

Okay. Sir, my question is, what is the current status of all ongoing regulatory and judicial, including SAT, SEBI matters? We have repeated adjournment.

Okay. Any other questions?

No, sir. No.

I already read out there is a subcommittee that is formed to directly address the regulatory issues directly with the regulator. So that is why that was specifically put in place. Now whether it is SAT or whether it is directly with SEBI or whether it is in a high court, all those are already there. We are publishing as they happen. So the point of having that statement from the Board was -- what the Board decided was to give a sense to the shareholders on -- it is work in progress and it is doing well. The first report after the subcommittee was formed has already been submitted. And it is moving in the right direction as per the subcommittee.

Next question is from Mr. Madhu.

Am I audible now?

Yes, sir. Please go ahead.

Mr. Reddy, I just want to congratulate you on the Q3 results, which is excellent.

Thank you.

But the only thing is investors feel that it's only in papers. So my question is, why can't the foreign subsidiaries give the audited results to the statutory auditors in India so that they can -- they don't have the disclaimer and the investors will have the confidence that the actual business is genuine.

Yes, yes. I just explained that to you. So the -- what auditor means or what the statement clearly says, it's more from a disclaimer perspective. They have not done an in-depth analysis into that given -- so this will come through going forward. From next quarter on, that comment will not be on, that I promise you. We were trying to get that done in third quarter. It did not happen. So it has nothing to do with -- okay, then you're saying this is only on paper. I mean that's obviously, every investor or every individual has their own writing, deciphering whatever they want. We are very clear that we are presenting the actual facts as they are. So that's a call that the investor has to make.

Yes, that's for the investors to believe because considering the past issues that we have, mainly it is the investors' trust that it takes it forward. And if you have that disclaimer in all the statements, financial statements that you have, the investors have all the rights to believe because you know the sensitivity which had after the posting the results. I'm not complaining about the price once everything is done, the share will have its right valuation. So I'm hoping that all these things have to be addressed. And I also have sent a 15-point note to you. If you can address that, I don't want that in this meeting because many people will be ready to ask questions. I've sent a mail to you and the company ask -- 15 questions. If you can answer to that in written, that will be a great thing from our side so that every -- the ambiguity is cleared, and we will have the confidence that we can stick on.

Okay. Perfect. We will do that. Thank you. Rajesh?

So the next question we'll have from Mr. Rajan Bhave.

So my first question is regarding top line, sir, to Suresh Reddy, like after you resigned in FY '24, the fundamentals fall badly same with FY '25. And also, we thought that as management was confident that in FY '26, at least we will recover with respect to FY '23. So are we still on track to -- comparable to FY '23 or it will take some time? That's the question number one. Second question is regarding operating margins. So earlier, it used to be good operating margins where profit was also better, but now operating margin like as per Screener, it is at 24% earlier was some 30-odd percentage. So what actions are we taking to restore the operating margins? And the third question would be with respect to Jacob Nizri's 44 Ventures. Like I know OMS was earlier managed by them. But now when you see they have lots of investments going on in AdTech. So are they directly competing with us in any business levels like regarding possible loss of business with them is what I want to know. So yes, 3 questions.

Thank you, Mr. Bhave. So first point is with respect to the margins, yes, we are acutely aware. And as you rightly pointed out, while there is a huge emphasis, there are 2 parts to -- if you broadly look at financial view of a company, one is the amount of business that is brought in. Two is how can we execute that profitably, right? So both these parts are important. So you see this increase in top line is slowly picking up, and you can see and we were hoping that we will cross, but I don't know where it will land. I don't have an answer for you. We'll see how this quarter goes. And based on that, we'll be able to tell you. But as of January and early February, things are better, but we'll see how that plays out. So I can't make a comment on that. The December quarter was definitely better than -- a lot better than last quarter, but it didn't go to the level that you rightly said to '23 level, but that's fine. I don't -- I'm not too concerned about that. It's important that the sales is happening well, and we are just picking up more and more business. The second part is the margins, which is very nicely brought out by you. It's important. Yes, we were almost around 30%. Overall, industry itself has gone through some transformation, sir, in the last 3, 4 years. There are a lot more players, a lot more activities happening, a lot more automation is happening. So the demands from our demand partners is definitely they are asking for better pricing. So that's where we are struggling on trying to improve. We are still doing very good margins if you compare to the industry. And we are trying hard to improve that with better efficiencies and better systems in place. And AI is playing a very big role. Agentic AI is a big area that my tech team in Israel is looking very closely, trying to see how we can improve and how we can do things by having fewer people do more sales and in effect, improve the profitability. So those are certain things that are happening. I can have a session if somebody is interested on the details of that, that can take a whole call on that. And I forgot your last question, sir. Could you repeat? Rajan Bhave?

Yes. So it was with respect to Jacob Nizri's Ventures. We are also heavily invested.

I think I just answered that just now. I just talked to you about that. Yes, Mr. Nizri is -- he was -- when we bought OMS, he was running OMS, and he did a great job with the company and helped us expand across the world. So he's been a very great operational leader for us. But he has his own ventures and he's moved on into his own stuff. He's doing investments. There is a clear Noncompete Agreement between us. So I don't see us competing in any areas. This is a very large space, as you're well aware. It's billions of dollars of business across the world. So we are very clear. I think, in fact, we aid each other. We work with each other on a lot of things. So the teams work closely. So I don't see that as a competing environment. It's more a collaborative relationship with them. So that's the situation today.

Okay, sir. The next question is from Mr. [ Nirmal Bhatia ].

I am audible now?

Yes, please go ahead.

Mr. Suresh, I have received a lot of information from out of my 20 points, only the few are left, which I'm going to repeat. What is the amount of the loans given by the parent company to the subsidiaries? First question. What is their age-wise statement? Third question, are we charging any interest charges among them? Fourth question, are these recoverable, what the status of recovery and time and amount of recovery? That's it. If you can clarify, I will be obliged.

Okay. Top of my head, I'm not carrying the numbers. So can you help me? I would actually try to publish this maybe in the next month or so. We'll put all the pieces together and put it out for your information.

You are going to send me the e-mail.

I'll send you an e-mail. I'll just publish it publicly about it. So you can see in the next presentation that will be included.

Yes. But this aging is very important.

We will cover that.

The next question will be Mr. R. S. Please go ahead, sir.

Am I audible?

Yes, sir. Please go ahead.

Why GST number of companies not functional till now?

Can you repeat?

Why our goods and service tax registration number is not functional till now?

I think it's in the process of revival. It's going through that. There were -- I think we should get it fairly soon. There was because of various documents that have to be filed for revival because during the downtime during nonfunctioning time, there were some challenges. All those had to be covered. So that is happening. You should see it fairly soon.

The last question will be from Mr. [ Anvin Abraham ]. Please go ahead, sir.

You can hear me now?

Yes. Go ahead, sir.

Congratulations, everyone. I have only one question that is actually image and reputation of the company and the financial results credibility will have more weightage if you appoint a Nifty 100 auditor instead of a reputed auditor, as you said. What is stopping the company to appoint a Nifty 100 auditor? And what is the time line for appointing as -- a Nifty 100 auditor? That is only -- because that only will help the image of the company in the market. What is stopping?

Nothing is stopping -- nothing has stopped. Yes. There's no issue there. Our auditor is doing a very good job. I don't want to discredit any professionals work. They're doing a great job. There's no problem. What we had discussed in the past, sir, we have talked about having 4 divisions and have reputed auditors. So that could be Nifty 100 auditor also. There's nothing that will stop us, but it will be across the world. It won't be in India alone. These subsidiaries are across the world. So wherever is the most reputed auditor in that part of the world, we will have the right auditor come, and that will be consolidated in the parent. That is the plan, which is what I already said, and its work is happening as we speak.

Okay. Sir, only thing is it has to be done as early possible because that only will have the image of the company in the market.

Point taken.

It is taking time by saying excuses like structural changes, strategic decisions, all these things ultimately is spoiling the price of the share. By increasing the image only the price of the share will increase. That is -- can be validated by a Nifty 100 auditor.

Okay, pointed.

Thank you, sir. This concludes the conference call. Thank you all for joining us today. Sir, if you want -- Mr. Suresh Reddy, sir, if you want to say thank you, please go ahead.

Yes, sure, sure. Thanks a lot for joining the call. And we apologize about a little bit of a snafu in the middle of the call. I think there was some challenge technically. We'll ensure it doesn't repeat in the future. Thanks a lot.

I apologize again. So thank you...

Thank you for joining us.

Thank you. Bye.