SpiceJet shares jump 5% post Q4 results; Nuvama sets target price at Rs 48

Shares of SpiceJet Ltd shrugged off concerns over rising crude oil prices globally and jumped 5 per cent in Monday's trade, as the troubled airline operator clocked its highest-ever quarterly profit of Rs 319 crore for the March quarter. Yields jumped 28 per cent YoY and offset operational weakness.

The stock rose 4.99 per cent to hit a high of Rs 46 on BSE, trimming its year-to-date losses to 20.33 per cent.

Nuvama, which suggested a target price of Rs 48 on SpiceJet, said available seat kilometers (ASK) margin crashed 29 per cent YoY due to higher aircraft on ground (AoG). Q4 yields jumped 28 per cent YoY on a better route mix and strong demand due to the 45-day Maha Kumbh festival. 

It said operational fleet expansion is likely delayed given no material change in fleet post-Rs 3,000 crore QIP and resultant restructuring of lessors’ dues, adding that the read-through from IndiGo is for a bleak Q1FY26E amid geopolitical concerns. 

"A revival is likely to be gradual post-QIP; turnaround a key variable to monitor. In all, we are cutting FY26E/27E EBITDAR by 14 per cent/14 per cent on delayed turnaround; this along with a rollover to FY27E yields a lower target of Rs 48; retain ‘HOLD’," Nuvama said.

SpiceJet's operational fleet was made up of 25 aircraft at the end-March, lower than 28 aircraft disclosed at the end of June 2024, indicating an inability to expand operational fleet even after restructuring of lessors’ dues. 

"Furthermore, IndiGo’s management is evaluating the impact on PRASK for Q1FY26E in the wake of geopolitical tensions, but they have observed materially adverse impact on cancellation rates and booking trends, which does not bode well for the industry as a whole, including SpiceJet," Nuvama said.

Nuvama said the QIP of Rs 3,000 crore should allow repayment of outstanding dues and induction of aircraft on ground, which has commenced. 

"We reckon recovery shall be gradual; a full turnaround a key variable. We are cutting FY26E and FY27E EBITDAR by 14 per cent each on delayed turnaround and target by 9 per cent to Rs 48 (on a rollover to FY27E)," it said.