Shares of SpiceJet Ltd fell 6.48% to ₹44.86 on Tuesday despite the airline reporting a ₹26 crore net profit in Q3FY25, marking a significant turnaround from the ₹300 crore loss in the same quarter last year.
Financial Performance and Turnaround Strategy
The airline attributed its return to profitability to strong passenger demand, operational efficiency, and improved yield management. SpiceJet’s total revenue surged 35% YoY to ₹1,651 crore, while its passenger load factor (PLF) remained stable at 87%, reflecting consistent occupancy levels.
During Q3, SpiceJet raised ₹3,000 crore from qualified institutional investors, significantly improving its liquidity position. This capital infusion helped the company achieve a net worth of ₹70 crore, turning positive for the first time in a decade.
Ajay Singh, Chairman and Managing Director of SpiceJet, commented:
“This quarter’s performance is a testament to SpiceJet’s resilience and our relentless focus on financial and operational recovery. 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. The past is behind us, and we are now firmly focused on building a stronger, more resilient future for SpiceJet.”
Operational Enhancements and Future Outlook
SpiceJet has allocated ₹170 crore to bring grounded aircraft back into service, aiming to enhance capacity and optimize fleet utilization. In Q3, the airline’s Revenue Available Per Seat Kilometre (RASK) stood at ₹4.57, and it expects double-digit growth in RASKs during Q4 of FY25 due to strong demand and network optimization.
Nuvama’s Rating and Target Price Revision
Despite the improved financials, Nuvama Institutional Equities has maintained a ‘Hold’ rating on SpiceJet but has lowered its target price by 14% to ₹52. The brokerage firm cited a reduction in FY25E/26E EPS estimates by 14% and 13%, respectively, and adjusted EV/EBITDAR and lease rental multiples to align with IndiGo’s valuation metrics.
“We are cutting FY25E/26E EPS by 14%/13% and TP by 14% to ₹52 (rolling forward to Q3FY27) as we lower EV/EBITDAR multiple to 7x (from 9x, in-line with IndiGo) and lease rentals multiple to 6x (from 7x, in-line with IndiGo). Retain ‘HOLD’,” Nuvama stated.
Stock Performance and Market Reaction
SpiceJet’s stock dropped to ₹44.86, marking a 6.48% decline from its previous close of ₹47.97. The stock traded in a day range of ₹44.05 – ₹48.50. The airline’s market capitalization currently stands at ₹58.32 billion, with an average trading volume of 5.86 million shares.
Disclaimer
The information provided is for informational purposes only and should not be considered financial or investment advice. Stock market investments are subject to market risks. Always conduct your own research or consult a financial advisor before making investment decisions. The author or Business Upturn is not liable for any losses arising from the use of this information.
