MMTC shares extend fall, dive 10% today; here's what technical analysts say

Shares of MMTC Ltd fell sharply on Tuesday, extending their losing run for the third straight session. The stock cracked 10 per cent today to settle at Rs 58.41 over its previous close of Rs 64.89. The company recently said its subsidiary has received a liquidation notice from UCO Bank (Singapore). "We would like to inform you that our wholly-owned Subsidiary, MTPL Singapore has got notice for its liquidation which has been filled by UCO Bank before the general division, High Court of Singapore due to default made by it in repayment of its commercial transactions. The date of court hearing has been scheduled on September 29, 2023," MMTC stated in a BSE filing.

MMTC, later in a separate filing, said it has to postpone its 60th annual general meeting (AGM) for the financial year 2022-23 (FY23) due to the liquidation notice and some other issues. "This is to inform you that the AGM for FY23, which was to be convened by September 30, 2023, i.e, within six months from the closure of the financial year would not take place," it stated.

Default notice received from the UCO Bank regarding non-payment of the commercial transaction, court hearing due date and non-receipt of management reply on statutory auditors' comments resulted in delay in preparation of the annual report, it underscored.

MMTC further mentioned that the registrar of companies (ROC) has granted a three-month extension to the PSU for holding the AGM.

On technical setup, the counter traded lower than the 5-day simple moving average (SMA) but higher than the 10-day, 20-, 30-, 50-, 100-, 150-, 200-day SMAs. The counter's 14-day relative strength index (RSI) came at 64.48. 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 8.14 against a price-to-book (P/B) value of 6.93.

The stock has a one-year beta of 1.31, indicating high volatility.

Technical analysts largely believed that the counter looked 'bearish'. Support could be seen around Rs 53 level.

AR Ramachandran from Tips2trades said, "MMTC has turned bearish on the daily charts with strong resistance at Rs 68. Investors should be booking profits at current levels as a daily close below support of Rs 53 could lead to a fall till Rs 44 in the near term."

Market expert Ravi Singh suggested that the stock looked weak. It may slip towards Rs 50 level in the near term, he said.

MMTC is an international trading company. At present, the government holds an 89.93 per cent stake in the PSU.

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