Brightcom Group shares regain multibagger tag, rebound 102% from 52-week low; more steam left?

Shares of Brightcom Group Ltd have reclaimed the multibagger tag after turning into a penny stock last month. The stock has rebounded 101.73 per cent from its one-year low of Rs 9.27, a level seen on April 28, 2023. The scrip on Wednesday settled 5 per cent higher at the upper price band of Rs 18.70, taking its winning run to the third straight session. The sharp movement in the share price came after the fourth-quarter (Q4 FY23) results.

"Buying activity has been seen in Brightcom's share price after Q4 results. The company's standalone net sales increased by 19 per cent, year-on-year (YoY). Net Profit increased by 2,936 per cent, YoY, to Rs 4.25 crore from Rs 0.14 crore. EBITDA margins also increased by 300 basis points (bps). The stock price may touch Rs 20 in this momentum," said Ravi Singh, Vice-President and Head of Research at Share India.

However, investors must be cautious before investing in this stock as charges of regulatory non-compliance are still open, Singh added. Market regulator SEBI 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.

The stock has declined 35.85 per cent on a year-to-date (YTD) basis and 69.37 per cent in a year. That said, the scrip, which is backed by seasoned investor Shankar Sharma, has zoomed 738.57 per cent in the past five years. As of March 2023, Sharma owns a 1.24 per cent stake in the company.

Today, Brightcom's Board of Directors approved a final dividend payment of Rs 0.10 per equity share of Rs 2 for FY23.

On the technical setup, support on the counter could be seen at Rs 17.

AR Ramachandran from Tips2trades said, "Brightcom Group stock price is bullish but also overbought and has resistance now at Rs 20.45 on the daily charts. Investors should book profits at current levels as a daily close below the support of Rs 17 could lead to a target of Rs 14.5 in the near term."

Around 48.01 lakh shares changed hands today, which was lower than the two-week average volume of 78.82 lakh shares. Turnover on the counter stood at Rs 8.92 crore, commanding a market capitalisation (m-cap) of Rs 3,773.51 crore.

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 halted their four-day winning run today, dragged by banks, financials, metals and energy stocks. The 30-share BSE Sensex pack fell 347 points or 0.55 per cent to settle at 62,622, while the broader NSE Nifty index moved 99 points or 0.53 per cent lower to close at 18,534.