This multibagger stock zoomed over 2800% in one year! Is it worth buying?    

Shares of Brightcom Group Limited have managed to deliver a dreamy return to its investors in the last one year. The scrip jumped to Rs 189 on January 19, 2022, from Rs 6.49 on January 19, 2021.
 
This means, an amount of Rs 1 lakh invested in this multibagger stock a year ago would have turned into Rs 29 lakh today. Along with generating over 2800 per cent return in the last one year, the stock has zoomed over 7000 per cent in the last three years.
 
With a market capitalisation of more than Rs 18,600 crore, the shares stand higher than 50 day, 100 day and 200 day moving averages but lower than 5 day and 20 day moving averages.
 
Is it a good ‘buy’?
 
According to Dr. Ravi Singh-Vice President and Head of Research, ShareIndia, the stock is under profit booking zone after the recent upswing on the announcement of bonus shares. It may touch the level of Rs 173-171 in the next trading sessions. The stock may witness support near 170 levels and fresh volumes may trigger around lower levels.
 
Mr. Manoj Dalmia Founder and Director of Proficient Equities Limited noted that the company aims to create a free cash flow of Rs 250 crore by June 2022. The company is reducing debt and has ROE, ROCE at 15.6% and 21.6% respectively. However, the promoters have decreased stakes over the year.
 
He added that there can be an upside till Rs 215 if closing happens above Rs 193 else it can come down till Rs 162 to take support.
 
Ujjawal Kumar, Research Analyst, Green Portfolio, said that there are a significant number of corporate governance issues with the company and hence his view of the company and management is very negative.
 
He noted that the quality of accounting disclosures is very poor. There isn't much clarity on capital work in progress, intangible assets, etc. Also, the promoter stake has been reducing consistently and almost no presence of FIIs & DIIs on the shareholding is worrisome for a company with close to 20k crore of market cap.
 
"BCG’s Investments in Subsidiaries (recorded at cost value) and their return on equity are not encouraging. Also, the financials of the subsidiaries were not audited regularly. The company has also not been very investor-friendly and dividends are far and few. Due to these reasons, we would advise investors to skip this stock," he added.
 
Q2 earnings
 
The consolidated revenue of the company jumped 73% to Rs 1103.86 crore in Q2FY22 as against Rs 639.66 crore in Q2 last year, owing to increased consumer usage of digital media and digital channels to conduct commerce across the world, post the pandemic.
 
The company informed that higher online sales led to much better eCPMs (effective Cost per Impression) for digital marketers. Profit for the quarter more than doubled to Rs 212.15 crore from Rs 103 crore in Q2 last year.
 
Brightcom Group further added that the outlook for the adtech business has improved dramatically in the past 12 months and continues to remain very strong for the next period.
 
About the company
 
Brightcom Group is a global provider of comprehensive online or digital marketing services to direct marketers, brand advertisers, and marketing agencies.
 
The company is divided into three major divisions: (i) Media (Ad-Tech and digital marketing), (ii) Software services, and (iii) Future technologies. Its primary clients are end advertisers, agencies and publishers, ad exchanges and networks.
 
Brightcom client list contains some of the biggest names like Airtel, British Airways, CocaCola, Hyundai Motors, ICICI Bank, ITC, ING, Lenovo, LIC, Maruti Suzuki, MTV, P&G, Qatar Airways, Samsung, Viacom, Sony, Star India, Vodafone, Titan, and Unilever.