Mumbai, Feb 27 SpiceJet's stock on Thursday took a hit by falling over 8 per cent during an intra-day low as the brokerage firm Nuvama slashed its target price by 14 per cent while maintaining a 'hold' rating.
At the closing bell, the share saw a slight recovery to close at Rs 44.72, down by Rs 3.25 or 6.78 per cent.
The firm raised concerns about the airline’s lack of transparency in financial data, a sharp 41 per cent drop in available seat kilometres (ASKM) year-on-year (YoY), and the fact that 30 per cent of its aircraft remained grounded in the second quarter.
A day ago, on February 26, the low-cost airline also witnessed a sharp decline (on-year) in its revenue in Q3 of the current financial year (FY25) to Rs 1,178.7 crore from Rs 1,850.4 crore in a year-ago period (Q3 FY24).
According to its exchange filing, the company suffered an increase in its net loss, which widened to Rs 441.7 crore in the July-September quarter (Q2 FY25).
It also successfully raised Rs 3,000 crore from institutional investors, pushing its net worth to Rs 70 crore - the first time in a decade that the airline is not in the red.
However, Nuvama pointed out that the Rs 3,000 crore fundraising would primarily be used to clear dues and bring grounded planes back into service, making the road to full recovery a slow one.
The brokerage also warned that if the economy weakens, corporate and leisure travel demand could decline, negatively impacting the airline’s future earnings and valuation.
However, the airline reported a profit of Rs 26 crore in the third quarter of FY25.
SpiceJet credited its profit to strong passenger demand, better efficiency, and improved pricing strategies.
“For the first time in a decade, the company has turned net worth positive -- an important milestone that underscores the success of our turnaround strategy,” SpiceJet CMD Ajay Singh said.
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