Brightcom Group Q4 FY26 Results (NSE: BCG)
Signal: Margin expansion
The read
Consolidated revenue ₹159,663.96 lakhs (+61.8% YoY) and PAT ₹19,802.95 lakhs (+60.9% YoY) reflect strong momentum in digital marketing, with EBIT margin expanding 362bps. However, auditor qualifications (multiple, including SEBI proceedings, impairment issues, low cash conversion, and high tax rate) cast doubt on earnings quality and governance.
| Metric | Value | YoY | QoQ |
|---|---|---|---|
| Revenue | ₹1,596.64 Cr | 61.8% | -28.5% |
| EBIT | ₹339.34 Cr | 94.9% | |
| Net profit | ₹198.03 Cr | 60.9% | |
| EPS | ₹0.98 | 60.7% | |
| EBIT margin | 21.25% |
P&L walk
Revenue grew 61.8% YoY to ₹159,663.96 lakhs with cost of sales growing slower (48.0%) driving gross margin expansion of 520bps. EBIT margin expanded 362bps, but employee costs jumped 146.6% YoY. PAT grew 60.9% but effective tax rate rose to 39.5% from 29.4%, partly offsetting operating gains. EPS tracked PAT.
Segments
Digital Marketing segment contributes 93.4% of revenue and essentially all profit (EBIT of ₹33,946.22 lakhs vs total ₹33,933.70 lakhs); Software Development segment is marginal and posted a small loss this quarter.
Key positives
- Revenue grew 61.8% YoY, driven by digital marketing segment (+67.4%).
- EBIT margin expanded 362bps YoY to 21.25%, showing operating leverage.
- No debt and strong cash balance of ₹1,41,497.70 lakhs (net cash).
- PAT grew 60.9% YoY, tracking revenue growth.
Key concerns
- Auditor qualifications on multiple issues: SEBI order for historical examination, non-consolidation of Vuchi Media, no impairment on Ybrant Media subsidiary, reliance on CPA confirmations for 86% revenue.
- Operating cash flow for FY26 only ₹10,264.89 lakhs vs PAT of ₹74,122.84 lakhs (13.8% conversion).
- Trade receivables at 273 days and increased 32.1% YoY.
- Effective tax rate jumped to 39.5% from 29.4% YoY.
- Standalone operations loss-making; entire profit dependent on subsidiaries.
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