Shares tank 36% in a month after 1,168% gain in the past one year amid rumours of financial stress
Kairavi Lukka (HINDUSTAN TIMES; July 2, 2024)

The sharp swings in the share price of a Mumbai-based film production company in the past month has raised eyebrows on Dalal Street. In the previous six trading sessions, Vashu Bhagnani Industries, formerly known as Pooja Entertainment, has been locked in the daily lowest tradable limit on the BSE, declining nearly 36% in this period following news reports that the company was under financial stress.

Shares of the company, owned by veteran film producer Vashu Bhagnani, have rallied 1,168% in the past one year, and 355% so far in 2024, taking the company's market cap from Rs. 82 crore a year ago to over Rs. 1,000 crore now.

The stock closed at Rs. 298.85 on Monday, 5% lower - the lowest tradable limit in the trading session. The recent losing spree in the shares has continued even after the company, in a stock exchange disclosure, denied news reports that said the entity sold off its office building, laid off staff and is seeing delay in salary payments.

Before the news surfaced on June 24, shares of Vashu Bhagnani Industries had almost doubled in just one month, from Rs. 209 on May 24 to Rs. 410.

"Pooja Entertainment is a classic example of a share doing better than the market but without any fundamentals," said Arun Kejriwal, founder, KRIS, a Mumbai-based investment consultancy firm. "Such price movements make one believe that it is not natural but artificial."

The company's consolidated profit for FY24 stood at Rs. 8 crore as against Rs. 2.86 crore the previous year. Consolidated revenues were at Rs. 58.07 crore during the year as against Rs. 46.6 crore in the previous year.

Film trade analysts claim the company's recent movies have not been profitable. "We have not seen Pooja Entertainment's movies do well in the last 23 years. The production house's last hit movie was in 2001 named 'Mujhe Kuchh Kehna Hai'; and ever since then, all their movies have tanked," said Komal Nahata, a trade analyst.

"Recent releases like Bade Miyan Chotte Miyan, Mission Raniganj, and Bellbottom have also failed to break this streak and were box office flops."