Brightcom Group shares continue to rise after regaining multibagger tag, up 27% in 5 sessions; here's what analysts say

Shares of Brightcom Group Ltd on Friday continued their climb after reclaiming the multibagger tag a couple of sessions back. The stock today jumped 5 per cent to hit the upper price band of Rs 20.61, taking its winning run to the fifth straight day. The scrip has surged 27.46 per cent in five sessions.

Brightcom, which turned into a penny stock at the end of April this year, has rebounded 122.33 per cent from its one-year low of Rs 9.27. The sharp movement in the share price came after the fourth-quarter (Q4 FY23) results.

Yet, the stock has declined 29.30 per cent on a year-to-date (YTD) basis and 64.47 per cent in a year. That said, the scrip, which is backed by seasoned investor Shankar Sharma, has zoomed 910.29 per cent in the past five years. As of March 2023, Sharma owns a 1.24 per cent stake in the company.

"Buying activity has been seen in Brightcom's share price after Q4 results. The company's standalone net sales increased by 19 per cent, year-on-year (YoY). Net Profit increased by 2,936 per cent, YoY, to Rs 4.25 crore from Rs 0.14 crore. EBITDA margins also increased by 300 basis points (bps). It may hit a target of Rs 25," said Ravi Singh, Vice-President and Head of Research at Share India.

However, investors must be cautious before investing in this stock as charges of regulatory non-compliance are still open, Singh added. Market regulator SEBI issued a showcause notice to the ad-tech firm. It also flagged concerns and made observations about the irregular and incorrect filing of shareholding pattern of the company.

On the technical front, two analysts said the counter has been highly volatile and erratic in the recent past.

"The stock has been showing erratic movement. It is mostly one of the operator-driven type stock," said Vaishali Parekh, Vice-President - Technical Research at Prabhudas Lilladher.

Echoing similar views, Osho Krishan, Senior Analyst - Technical & Derivative Research at Angel One, said, "The stock is very volatile with regular circuit movements."

Support on the counter could be seen at Rs 19, another analyst said.

AR Ramachandran from Tips2trades said, "Brightcom Group stock price is bullish but also overbought and has resistance now at Rs 21.20 on the daily charts. Investors should book profits at current levels as a daily close below the support of Rs 19 could lead to a target of Rs 14.50 in the near term."

VLA Ambala, Research Analyst at Stock Market Today, said, "In the coming days, we can see targets between Rs 24 and Rs 27. If the stock price sustains above Rs 26, we can see further upside towards the Rs 30-50 range. Those invested in the stock with a long-term view must consider Rs 8 as a strict exit level."

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 traded higher today, pausing their two-day fall. The domestic indices turned positive, led by gains in banks, metals, consumer, pharma and automobile stocks.

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