Brightcom Group shares up 37% in two sessions; time to book profit?

Brightcom Group shares continued their strong upward move for the second straight session in Friday's trade. The stock moved 14.17 per cent higher to trade at Rs 22.97. At this price, the scrip has gained 36.65 per cent in just two days. Despite the said rise, it has slipped around 27 per cent on a year-to-date (YTD) basis.

The stock witnessed heavy trading volumes today as 2.44 crore shares were last seen changing hands on BSE. The figure was more than four times compared to the two-week average volume of 60.55 lakh shares.

Turnover on the counter stood at Rs 53.66 crore, commanding a market capitalisation (m-cap) of Rs 4,288.08 crore. There were 44,05,086 sell orders against buy orders of 9,22,785 shares.

On technical setup, support on the counter could be seen at Rs 18. On the higher side, it may climb up to Rs 27 in the near term. An analyst suggested that investors should book profit at current levels.

AR Ramachandran from Tips2trades said, "Brightcom Group looks bullish but also overbought on daily charts with next resistance at Rs 24.9. Investors should book profits at current levels as a daily close below support of Rs 20 could lead to a target of Rs 15 in the near term."

DRS Finvest founder Ravi Singh said that the stock is likely to see Rs 26 level in the near term. Keep stop loss placed at Rs 18, Singh mentioned.

Jigar S Patel, Senior Manager - Technical Research Analyst at Anand Rathi Shares and Stock Brokers, said, "Support will be at Rs 18 and resistance may be seen above Rs 25. The stock could see a trading range between Rs 15 and Rs 27 during the next couple of weeks."

The counter was trading higher than the 5-day, 10-, 20-, 30-, 50-, 100-, 150-, 200-day simple moving averages (SMAs). The counter's 14-day relative strength index (RSI) came at 77.60. 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 224.54 against a price-to-book (P/B) value of 2.58.

The scrip has a one-year beta of 1.03, indicating average volatility.

The stock, which was once considered multibagger, is backed by seasoned investor Shankar Sharma. It has zoomed 1,489.55 per cent in the past five years. As of September 2023, Sharma owns a 1.14 per cent stake in the company. He has been restricted by Sebi from selling further shares.

In the recent past, the counter saw heavy selling pressure after the company's chairman and managing director (CMD) Suresh Kumar Reddy, along with chief financial officer (CFO) SL Narayana Raju, resigned following a Sebi order. The Securities and Exchange Board of India (Sebi) had restrained Reddy and Raju from holding any directorial positions.

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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.

(Disclaimer: Business Today provides stock market news for informational purposes only and that should not be construed as investment advice. Readers are encouraged to consult a qualified financial advisor before making any investment decisions.)

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