Brightcom Group shares continue to fall for sixth session, dive 10% to hit fresh 52-week low

Shares of Brightcom Group Ltd extended their fall for the sixth straight session to hit their fresh one-year low level in Friday's trade amid heavy volumes. The stock dived 10 per cent to hit its lower price band of Rs 11.98. The scrip was once considered a multibagger. It has slumped 86.26 per cent in a year and 54.10 per cent on a year-to-date (YTD) basis. That said, in the past five years, the counter has surged 414.62 per cent.

Around 1.65 crore shares changed hands today on BSE, which was more than double compared to the two-week average volume of 65.32 lakh shares. Turnover on the counter stood at Rs 20.82 crore, commanding a market capitalisation (m-cap) of Rs 2,704.02 crore.

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 22.18. 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 513.90. It has a price-to-book (P/B) value of 1.72.

"Brightcom Group looks bearish but also oversold on the daily charts with next support at Rs 11.25. Till resistance of Rs 14.75 is not broken, investors should avoid buying," said AR Ramachandran from Tips2trades.

Brightcom Group has a one-year beta of 0.83, indicating high volatility, as per Trendlyne.

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 rose sharply in early trade, led by gains in banks, financials, automobiles, technology and energy stocks.

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