Brightcom Group shares continue to rise, hit upper circuit today even as Sebi levies Rs 40 lakh fine

Shares of Brightcom Group Ltd on Wednesday extended their winning run for the seventh straight session. The stock jumped 5 per cent to hit the upper circuit of Rs 27.49 over its previous close of Rs 26.19. Today's upward move came despite the fact that market regulator SEBI has imposed a fine of Rs 40 lakh on Brightcom Group and its promoters for flouting regulatory norms related to insider trading from April 2020 to August 2021.

The Securities and Exchange Board of India (Sebi) slapped a fine of Rs 12 lakh on Geetha Kancharla, Rs 6 lakh, each, on Vijay Kumar Kancharla HUF, Vijay Kumar Kancharla, Karta of HUF and M Suresh Kumar Reddy (Chairperson and MD) and Rs 5 lakh, each, on S V Rajyalaxmi Reddy and Brightcom Group.

In response, Brightcom said it is currently consulting with its legal advisors to carefully evaluate the order and determine the appropriate steps, which may include compliance with the directives provided. Brightcom is under the scanner of Sebi over concerns of irregular and incorrect filing of shareholding patterns.

At today's high price of Rs 27.49, Brightcom has rebounded 196.55 per cent from its one-year low of Rs 9.27, a level seen on April 28, 2023, when it turned into a penny stock. The counter has settled higher in nine out of 10 sessions in June so far. Brightcom has gained 82.14 per cent in the past one month. Yet, it has declined 46.79 per cent in a year and 5.90 per cent on a year-to-date (YTD) basis. The stock reclaimed its multibagger tag in May-end this year.

The scrip, which is backed by seasoned investor Shankar Sharma, has zoomed 1,244.61 per cent in the past five years. As of March 2023, Sharma owns a 1.24 per cent stake in the company.

As per the company's growth outlook, revenue is expected to be in the range of Rs 9,196.03 crore to Rs 9,667.63 crore in the financial year 2023-24 (FY24), indicating a mid-point growth of 27.51 per cent as compared to the previous fiscal. Brightcom projects profit after tax (PAT) between Rs 1,659.14 crore and Rs 1,744.23 crore in FY24, citing a mid-point growth of 24.12 per cent.

Earlier this month, the company also issued a lengthy clarification on its accounting procedures, reporting, corporate governance, and other issues. "We are actively refining our reporting to ensure greater clarity and granularity to the accounting principles," the company stated in an exchange filing.

Bourses BSE and NSE have put the securities of Brightcom Group under the long-term ASM (Additional Surveillance Measure) framework. The parameters for shortlisting securities under ASM include high-low variation, client concentration, close-to-close price variation, average daily volume in a month and price-to-earnings (P/E) ratio. Exchanges put stocks in short-term or long-term ASM frameworks to caution investors about high volatility in share prices.

Meanwhile, Indian equity benchmarks traded lower in early deals today, dragged by financials and technology stocks.

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