Brightcom Group shares halt 9-day upward run, fall 5% today; here's what technical charts indicate

Shares of Brightcom Group paused their nine-day rising trend in Friday's deals. The stock slipped 5 per cent to hit its lower price band of Rs 19.27 against a previous close of Rs 20.28. Around 1.74 crore shares changed hands today on BSE. This was much lower than the two-week average volume of 69.93 lakh shares. Turnover on the counter stood at Rs 34.97 crore, commanding a market capitalisation (m-cap) of Rs 3,888.54 crore. There were 58,35,937 sell orders today as compared to sell orders of nil shares.

The company has appointed Radhakishore Pandrangi as an independent director for a five-year period. "The Board of Directors of the company approved the appointment of Pandrangi (DIN#06664969) as an Additional (Independent) Director of the company for a term of five years with effect from September 22, 2023, subject to the approval of shareholders in their forthcoming annual general meeting," Brightcom stated in an exchange filing.

In terms of value, the scrip saw extreme highs and lows this year. At today's low price of Rs 19.27, the scrip has rebounded 107.88 per cent from its one-year low price of Rs 9.27, a level seen on April 28 this year when it turned into a penny stock. Despite the mentioned rise, it has declined 55.85 per cent from its 52-week high of Rs 43.65, hit on October 11 last year.

Bourses BSE and NSE have put the securities of Brightcom under the short-term ASM (Additional Surveillance Measure) framework. Exchanges put stocks in short-term or long-term ASM frameworks to caution investors about high volatility in share prices.

The stock, which was once considered multibagger, is backed by seasoned investor Shankar Sharma. It has zoomed 1,176.16 per cent in the past five years. As of June 2023, Sharma owns a 1.14 per cent stake in the company, slightly lower from 1.24 per cent held in the previous quarter. Sharma has been restricted by Sebi from selling further shares.

The counter recently came under heavy selling pressure after Brightcom's chairman and managing director (CMD) Suresh Kumar Reddy, along with chief financial officer (CFO) SL Narayana Raju, resigned following a Sebi order.

For the unversed, the Securities and Exchange Board of India (Sebi) had restrained the company's top executives Reddy and Raju from holding any directorial positions.

On technical setup, the counter traded higher than the 5-day, 10-, 20-day simple moving averages (SMAs) but lower than the 30-day, 50-, 100-, 150-, 200-day SMAs. The counter's 14-day relative strength index (RSI) came at 51.92. 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 226.33 against a price-to-book (P/B) value of 2.60.

The scrip has a one-year beta of 1.47, indicating high volatility.

AR Ramachandran from Tips2trades said the stock has support around Rs 14.4 level.

Although, a few analysts pointed out that the stock pattern looked "somewhat erratic" with series of upper and lower circuits.

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 should not be construed as investment advice. Readers are encouraged to consult with a qualified financial advisor before making any investment decisions.)

 

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