Shares of Brightcom Group Ltd pulled off a strong rebound on Friday after touching fresh one-year lows, halting their five-day fall. The stock dived 10 per cent in intraday deals to hit a lower price band — also its 52-week low — of Rs 11.98. It eventually settled at the upper price band of 10 per cent, at Rs 14.64 over its previous close of Rs 13.31.
Around 2.94 crore shares changed hands today on BSE, which was more than four times compared to the two-week average volume of 65.32 lakh shares. Turnover on the counter stood at Rs 39.08 crore, commanding a market capitalisation (m-cap) of Rs 2,954.24 crore.
The company, in an exchange filing, shared an update on its board meeting. “We hereby inform you that the meeting of Board of Directors of the company will be held on Monday, April 3, 2023, at the registered office, inter-alia, consider the following matters, among other items of agenda: To consider the extension of Lock-in period of equity shares issued to the shareholders of Vuchi Media Group (MediaMint) pursuant to the termination of Share Purchase Agreement; and other business items,” it stated.
Once considered a multibagger, the company’s scrip has slumped 86.26 per cent in a year and 49.78 per cent on a year-to-date (YTD) basis. That said, in the past five years, the counter, which is backed by seasoned investor Shankar Sharma, has surged 463.08 per cent. As of December 2022, Sharma owns a 1.24 per cent stake in the company.
Given the massive fall in the share price, the company’s chairman and CEO issued a statement earlier this month. “Recent market volatility may have caused some concern and uncertainty regarding the future of Brightcom. However, I assure you that our company is in a strong financial position with solid fundamentals and a bright future. Our revenue has been consistently increasing along with our profits,” Suresh Reddy said.
On the earnings front, Brightcom said it reported a profit of Rs 543.93 crore in the December 2022 quarter (Q3 FY23), up 46 per cent on a year-on-year (YoY) basis. Revenue from operations came at Rs 2,865.17 crore in Q3 FY23, a 42 per cent YoY jump.
On the technical front, the stock traded lower than the 5-day, 20-, 50-, 100- and 200-day moving averages. The counter’s 14-day relative strength index (RSI) came at 29.80. A level below 30 is defined as oversold while a value above 70 is considered overbought. The company’s stock has a price-to-equity (P/E) ratio of 513.90. It has a price-to-book (P/B) value of 1.72.
“Brightcom Group looks bearish but also oversold on the daily charts. Till resistance of Rs 14.75 is not broken, investors should avoid buying,” said AR Ramachandran from Tips2trades.
Brightcom Group has a one-year beta of 0.83, indicating high volatility, as per Trendlyne.
The stock rout started after market regulator SEBI raised concerns about the company’s disclosures and financial transactions. The market regulator last year appointed Deloitte Touche Tohmatsu India LLP, to conduct a forensic audit of Brightcom’s financials.
The group consolidates ad-tech, new media and IoT (Internet of Things) based businesses across the globe, primarily in the digital eco-system. Brightcom’s consumer products division is focused on IoT. The company has a presence in the US, Israel, Latin America ME, Western Europe and Asia Pacific regions.
Meanwhile, Indian equity benchmarks closed the final trading day of financial year 2022-23 (FY23) on a higher note, led by gains in technology, banks, energy and financials. The 30-share BSE Sensex pack jumped 1,031 points or 1.78 per cent to close at 58,992; while the broader NSE Nifty index moved 279 points or 1.63 per cent higher to settle at 17,360.
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