Brightcom Group shares extend fall, crash 20% to hit fresh one-year low

Shares of Brightcom Group Ltd cracked 20 per cent to hit their fresh one-year low level in Wednesday's trade amid heavy volumes. The stock, which extended its fall for the fifth straight session, was locked in the lower price band of Rs 13.31 at the time of writing this story. Once considered a multibagger, the scrip has slumped 84.94 per cent in a year and 54.34 per cent on a year-to-date (YTD) basis. It has surged 411.92 per cent in the past five years.

Around 1.67 crore shares changed hands today on BSE, which was more than thrice compared to the two-week average volume of 53.88 lakh shares. Turnover on the counter stood at Rs 24.38 crore, commanding a market capitalisation (m-cap) of Rs 2,685.85 crore. There were 29,89,384 sell orders against buy orders of nil shares.

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," Suresh Reddy said.

"Our revenue has been consistently increasing along with our profits. We remain confident about the future of Brightcom and our ability to capitalize on emerging trends and technologies in the digital advertising space," he further stated.

On the earnings front, the company 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 was last seen trading lower than the 5-day, 20-, 50-, 100- and 200-day moving averages. The counter's 14-day relative strength index (RSI) came at 22.47. 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 642.08.

"Even though Brightcom Group is extremely oversold, it still looks very bearish with strong resistance at Rs 16.40 on the daily charts. A close below Rs 14.55 this week could lead to a lower target of Rs 10.90 in the near term," said AR Ramachandran from Tips2trades.

Brightcom Group has a one-year beta of 0.89, indicating high volatility.

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 traded higher in late deals today, led by gains in automobiles, banks, financials, consumer goods and metal stocks.

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