UFO Moviez announces acquisition, stock spikes up

The largest digital cinema distribution network and in-cinema advertising platform, UFO Moviez announced the acquisition of Scrabble Digital (SDL) through its wholly-owned subsidiary Scrabble Entertainment (SEL). SEL has approved the purchase of 3,95,428 equity shares of SDL which is SEL’s associate company. The purchase will be for cash consideration of Rs. 24 crore.

SDL has established digital laboratories in India and is engaged in providing related services which are inclusive of Digital cinema packets (DCP), Mastering, DCP cloning, transportation of encrypted DCP content across India and KDM Management. SDL is a company with paid-up equity capital of Rs. 59,31,420 and its revenue and PAT were at Rs 28.36 crore and 9.63 crore, respectively as on March 31, 2018. Its revenue is seen growing since FY16 and has reported growth of nearly 24 per cent in FY18.

After four consecutive weekly downfalls, the stock of UFO Moviez formed a Hammer-like pattern on October 12 week. The stock paused for a week and has bounced back again in the current week. On the daily time frame, the stock consolidated for 8 consecutive days and gave a breakout on Friday’s trade closing 5.5 per cent up supported by rising volumes and 14-period RSI bounce above 50. However, the stock resisted at 38.2 per cent retracement of the prior downward rally on a closing basis. So, it will remain in the wait-n-watch mode till the next week.