9/10/2016

SpiceJetsharesgain168%in1yearanalystsupbeatoncarrier'sgrowthprospects

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SpiceJet shares gain 168% in 1 year; analysts

upbeat on carrier's growth prospects
Ajay Singh-controlled budget carrier SpiceJet posted more than 100 percent rise in June
quarter net pro t.

S V Krishnamachari

September 10, 2016 18:05 IST

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Low-cost carrier SpiceJet's aggressive utilisation levels backed by tactical pricing & ancillary revenue
focus continue to augur well for revenue maximization, says JM Financial in a note. In Picture: A SpiceJet
aircraft prepares for takeo at the airport in Mumbai July 15, 2008 (representational image).

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Reuters

SpiceJet is poised to perform well in the coming quarters, sustaining its topline and
bottomline growth momentum, according to analysts. The share price of the Ajay Singhcontrolled budget carrier has soared 167.8 percent in the past year. From an almost 52-

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week low of Rs. 23.05 on Sept. 10, 2015, the stock has appreciated sharply to Rs. 61.75 on
Sept. 9, 2016.
The company is con dent of posting higher revenue growth and pro t based on e ective
eet utilisation or passenger load factor (PLF), increased eet size, lower interest costs as
a result of reduced debt and cost rationalisation.

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SpiceJet reported 104 percent rise in net pro t

for the rst quarter (Q1) ended June 2016 to
Rs. 149 crore and 37 percent increase in
revenues to Rs. 1,522 crore.

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By S V Krishnamachari

Fuel costs dropped 11.36 percent to Rs. 399.67

crore in Q1 from Rs. 358.88 crore in the
quarter ended June 2015. Finance costs also
declined sharply to Rs. 20.88 crore from Rs.
28.64 crore in the corresponding quarter last
year.

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9/10/2016

SpiceJetsharesgain168%in1yearanalystsupbeatoncarrier'sgrowthprospects

RELATED

"This quarter's results further demonstrate the

SpiceJet shares jump 20% on sharp

rise in Q1 net pro t

impact of e orts that are being put into

Domestic air tra c rises 26% in July

EDITOR'S PICK

strengthening SpiceJet." said Ajay Singh, CMD,

Spicejet Limited said in a statement, adding,
"We remain focussed on growing responsibly
in a growing but a challenging market."

Analysts expect the company to post consistent growth in the coming quarters on the
mix of multiple factors.

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JM Financial
The nancial services rm said that SpiceJet is on a growth trajectory on the back of
sensible pricing and utilisation of resources. "SpiceJet's aggressive utilisation levels
FY16E PLF @90%, block hours @ 151k hours backed by tactical pricing & ancillary revenue
focus, continues to augur well for revenue maximisation," wroteAshutosh Somani and
Nitin Agarwala in their note.
"Industry high load factors, cost rationalization by the new management, coupled with
signi cantly lower ATF prices have helped turn around the loss-making airline
delivering pro ts for six quarters in a row.
"SpiceJet's strong regional presence places it favourably to avail bene ts proposed in the
new Civil Aviation Policy's regional connectivity scheme," they added.
Prabhudas Lilladher

SpiceJet to declare June quarter results on

Wednesday
Budget carrier SpiceJet will be the last to declare its Q1
results, after IndiGo and Jet Airways.

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"With aviation companies performing better on parameters related to both revenues and
pro tability, we believe Spicejet is in a strong position to provide the best pro tability
growth in the sector, coupled with cheaper valuations as compared to the industry
leader, Interglobe Aviation," the brokerage said in a note.
"Lower industry eet size and the continued propensity of Indian travelers to gravitate
towards Low Cost Airline Carriers (as against preferring alternative modes or Full Service
Carriers) have led to higher Passenger Load Factor (PLF) for the airline companies.
"In tune with the above, SpiceJet o ers the highest PLF in the industry after a striking
return to pro tability in FY16 post four years of being in the red," Prabhudas Lilladher
added.
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Anand Rathi Institutional Research

"The change in its management, lower prices of crude oil, the government's sharper
focus, higher disposable incomes and the cost-bene t edge over the Railways were key
factors in SpiceJet's FY16 sharp turnaround. Revenue in FY17 is anticipated to grow 17%.
http://www.ibtimes.co.in/spicejetsharesgain1681yearanalystsupbeatcarriersgrowthprospects693269#ibtimes_comment

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SpiceJetsharesgain168%in1yearanalystsupbeatoncarrier'sgrowthprospects

And, in the next two years aviation turbine fuel (ATF) is expected to be stable. The
outlook continues to be robust."
"With the recent developments (BSE and SEBI both refusing the issue of warrants),
concerns about the ~24% dilution are fading, and we believe a settlement through
arbitration is possible," the brokerage said.
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