Brightcom Group shares continue to bleed, crack 86% in a year; here's what analysts say

Shares of Brightcom Group Ltd have lost more than 60 per cent of their value so far in 2023. The stock has dived 86.36 per cent in the past one year and 61.03 per cent on a year-to-date (YTD) basis. The scrip on Monday fell 5 per cent to hit a lower price band of Rs 11.36, continuing its freefall for the 10th consecutive session.

The counter was once considered a multibagger. Despite the above mentioned plunge, the stock, which is backed by seasoned investor Shankar Sharma, has surged 411.71 per cent in the last five years. As of March 2023, Sharma owns a 1.24 per cent stake in the company.

Market regulator SEBI has 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. SEBI said that the figures were not rightly reported which violated the norms.

The regulator made certain key observations, Brightcom said, which were on the impairment charges in its balance sheet for FY20 amounting to Rs 868.30 crore, shareholding pattern, compliance and reporting, among others. The company, in its response, said legal advice is sought with respect to the overall matter.

Last week on Friday, Brightcom said its promoters had pledged a part of their holdings to ICICI Bank, SBI, Canara Bank, Axis Bank and a few NBFCs back in 2013-2014, in order to collateralise the business debt.

"These financial institutions invoked the pledge and sold shares in the market, in 2014-2015 at prices between Rs 21.20 to Rs 6.40 (these are adjusted prices for all corporate actions including bonus, therefore, comparable to today's price). The total number of shares thus sold was around 5.4 crore shares on an adjusted basis," it stated in an exchange filing.

Also Watch: Reliance share price jumps after strong Q4 earnings; Should you buy, hold or sell RIL stock?

Analysts largely suggested investors avoid buying the stock. Ravi Singh, Vice-President and Head of Research at Share India, said, "Brightcom share prices may remain under selling pressure to touch the levels of Rs 5-2 in the near term. Investors are advised to exit their holdings immediately as the outlook of the stock is very uncertain and gloomy."

AR Ramachandran from Tips2trades said, "Corporate governance issues coupled with an overall bearish market sentiment can lead Brightcom Group stock price to support of Rs 10.90 very soon. Till daily resistance of Rs 16.40 is not breached on a closing basis, investors should avoid buying this stock."

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 27.15. 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 461.39. It has a price-to-book (P/B) value of 1.54.

Brightcom Group has a one-year beta of 0.99, Trendlyne data showed, indicating average volatility.

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 rose sharply in late deals today amid high volatility, led by gains in banks, financials, technology and consumer stocks.

Also read: HDFC, IndusInd Bank, RIL, Infosys, Tata Steel: Banks among 9 Nifty stocks that saw FPI selloff in Q4

Also Watch: HDFC Bank vs ICICI Bank: Which stock to buy after Q4 Results