NELCO tumbles on profit booking

NELCO hit a lower circuit of 5% at Rs 830.85 on profit selling after a recent steep surge.

Shares of NELCO surged 59.08% in the past ten sessions from its recent closing low of Rs 549.75 on 22 September 2021.

The counter hit a 52-week high of Rs 918.25 today. It has surged 377.50% from its 52-week low of Rs 174 hit on 15 October 2020. In the past one month, the stock has climbed 57.52% compared with 2.4% rise in the Sensex.

The recent rally in the stock materialised after the media reported that Nelco will partner Canada's Telesat to start commercial satellite communications (satcom) services by 2024. It will reportedly focus on offering affordable tariff to attract business-to-business (B2B) customers in a developing market that will include Elon Musk's SpaceX and Bharti Group-backed OneWeb as rivals.

On the technical front, the stock's RSI (relative strength index) stood at 58.08. The RSI oscillates between zero and 100. Traditionally the RSI is considered overbought when above 70 and oversold when below 30.

The stock is trading above its 50 and 200 days simple moving average placed at 790.73 and 616.41 respectively. These levels will act as crucial support zones in near term.

On a consolidated basis, net profit of NELCO rose 138.04% to Rs 4.38 crore on 11.27% rise in net sales to Rs 55.10 crore in Q1 June 2021 over Q1 June 2020.

Nelco, a part of Tata group, one of India's leading VSAT providers. It offer end to end networking solutions (Satcom Projects) and maintenance of private hubs and hybrid networks for its customers, from government to corporates.

The company holds the VSAT License, Internet Service Provider (ISP) License as well as the Inflight & Maritime Communication (IFMC) license issued by Department of Telecommunication, Government of India (DOT).

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