Brightcom Group shares continue to dwindle, down 50% in 2023 so far; here's what analysts say

Shares of Brightcom Group Ltd have lost almost half of their value so far this year. The stock has declined 49.74 per cent on a year-to-date (YTD) basis and 83.88 per cent in a year. The scrip today fell 5 per cent to hit its lower price band of Rs 14.65, continuing the downward trend for the fifth straight session.

The counter was once considered a multibagger. Despite the mentioned plunge, the stock, which is backed by seasoned investor Shankar Sharma, has surged 542.54 per cent in the last five years. As of December 2022, Sharma owns a 1.24 per cent stake in the company. The group is yet to declare its March quarter shareholding pattern.

The ad-tech firm on Friday informed exchanges about market regulator SEBI's showcause notice. The regulator made certain key observations, the company 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.

On the technical front, support on the counter could be seen at Rs 12, one of the two analysts said. The other analyst recommended exiting the counter immediately.

Ravi Singh, Vice-President and Head of Research at Share India, said, "Brightcom share price is under continuous selling pressure due to the recent crisis in the company. Investors are advised to exit their holdings immediately in the stock. The stock may witness a free fall in the near term to touch the level of Rs 5 in this negative sentiment scenario."

AR Ramachandran from Tips2trades said, "Brightcom Group looks bearish and now has support at Rs 12. Till the stock doesn't close above Rs 18 on the daily charts, investors should avoid buying."

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 35.29. 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 595.36. It has a price-to-book (P/B) value of 1.99.

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 fell sharply in late deals today, dragged by information technology (IT) stocks.

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