Spicejet Up & Indigo Down this morning !
As expected both airlines have had a stellar record Q 3 FY 16 profit on the back of favourable lower cost of Aviation Turbine Fuel that constitutes over 50% of Expenses
However Indigo declared their Q 3 post market on Thursday,January 21,2016 revealing Rs 657 crs PAT in the December 2015 Quarter.On Friday,January 22,2016 the Interglobe Aviation (Indigo) Share Price crashed 20% before recovering slightly to close at Rs 968.75 on BSE
This Monday Morning,January 25,2016 it has sunk further by over 7% in the first 20 minutes of trading to drop below Rs 900 !
In contrast Spicejet declared a record Rs 238 crs Q 3 FY 16 PAT postmarket hours on Friday,January 22,2016 and had held steadier @ Rs 70 levels after recovering from Rs 63 on the back of Indigo’s collapse
This morning Spicejet opened strong up 10% @ Rs 77 in contrast to Indigo’s continued fall and touched Rs 80 before correcting to @ Rs 75/76 levels,yet up over 7% over Friday closing inside first half an hour of trading
Spicejet has made Rs 334 crs profit for the nine months at December 31,2015.Thus Full Year FY 16 EPS is likely to be @ Rs 10 on current Equity of @ Rs 600 crs (Face Value is Rs 10)
However the Auditors ,while not qualifying their report, have directed attention to the huge net liabilities over assets of Rs 882 crs ,being accumulated loss of Rs 2877 crs against shareholder funds of Rs 1995 crs that could materially impact company’s survival going forward
However,as Spicejet is on a recovery turnaround path,with Ajay Singh,it’s co founder in 2005 back at the helm & aided by lower & therefore favourable Aviation Turbine Fuel Prices,it should be able to meet operating and financial challenges
Market Cap of Indigo presently this morning at 9.45 am is just under Rs 33000 crs at Rs 910 Share Price levels while SpiceJet’s Market Cap is just over Rs 4600 crs at Rs 76.70 levels
Sensex is up over 210 points at 24650 levels
Crude Oil Price has shown some re-bounce to US $ 31 a barrel from lows of US $ 28 a few days ago
Aviation Sector will continue to thrive on lower ATF which will remain it’s underlying for Profitability levels
Will be interesting to see how Jet,Indigo & Spicejet play out in 2016 !
Go Air too is lining up for an IPO
Disclaimer : Have an interest in Spicejet