Protean eGov Technologies, a significant holding in Ramesh Damani’s holding portfolio, saw a huge fall, its stock price declining by around 30% in two trading sessions. This steep fall comes after the company informed that it was not chosen by the Income Tax Department for the PAN 2.0 project—a sizeable contract to revamp India’s PAN and TAN systems.
Financial Implications
The PAN services segment has traditionally generated approximately 50% of Protean’s revenues. It is estimated that loss of this contract will bring about a 75–100% reduction in this revenue source over the course of the next 2–3 years, hitting the company very hard financially
Market Reaction
The market reacted quickly to this news:
- Monday: Stock dropped by 20%
- Tuesday: Stock decreased by another 13%
- Total Decline: About 30% in two days
This decline has also impacted sentiment among investors, especially in relation to Ramesh Damani, who is a major investor with more than 1% holding in Protean eGov Technologies.
Analyst Outlook
Analysts have revised their expectations on the stock, marking a support level at ₹980 and a resistance level at ₹1,110. A strong break above ₹1,110 may point to recovery, while a fall below ₹980 could mean further falling.
Conclusion
The recent news concerning Protean eGov Technologies highlights the potential risks of dependence on government contracts. Investors should watch the company’s strategic maneuvers and diversification attempts to cushion the effects of this material loss of revenue.
Note: This summary is provided on the basis of the most recent available information and for informational purposes only. Investors are recommended to make their own research or consult with financial advisors prior to investment decisions
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