Airline Stock Under Rs 50 Jumps After SpiceJet Assigned BB‐ with Stable Outlook by CARE Ratings Citing Improved Liquidity and Turnaround Prospects
The stock is up by 14 per cent from its 52-week low of Rs 43.61 per share.
Today, shares of SpiceJet Ltd jumped 5.90 per cent to Rs 49.70 per share from its previous closing of Rs 46.93 per share with 1.50 times spurt in volume. The stock is up by 14 per cent from its 52-week low of Rs 43.61 per share.
SpiceJet has received a second credit rating upgrade in three months, now holding a BB- with a stable outlook from CareEdge Ratings. This upgrade reflects the airline's ongoing financial recovery and successful execution of its turnaround plan, driven by improved liquidity and operational efficiency. The rating agency highlighted SpiceJet's recent fundraising efforts, which have bolstered its liquidity position and enabled the airline to gradually increase its operating fleet. Further financial stability is expected from outstanding share warrants.
Care Ratings specifically noted SpiceJet's adequate liquidity, stemming from preferential issuances and a QIP issuance that generated Rs 3,878 crore. These funds have been strategically allocated to clear statutory dues, settle with creditors, manage external commercial borrowings, unground aircraft, induct new planes, and service debt obligations. The agency also acknowledged SpiceJet's consistently high passenger load factor (PLF), the highest in the industry for the past four fiscal years, as a key factor for sustainable profitability.
SpiceJet's turnaround strategy heavily emphasizes reactivating grounded aircraft, a significant cost burden without revenue generation. The airline plans to bring the majority of these planes back into operation by the end of FY26, a move projected to boost revenue and drive profitability. Care Ratings believes that the promoter's extensive experience in the aviation industry, coupled with efficient fleet utilization, will be crucial for the continued success of SpiceJet's operational turnaround and maintaining its adequate liquidity.
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About the Company
SpiceJet is India's favourite airline that has made flying affordable for more Indians than ever before. SpiceJet is an IATA-IOSA certified airline that operates a fleet of Boeing 737s & Q-400s and is one of the country's largest regional players operating multiple daily flights under UDAN or the Regional Connectivity Scheme. Most of the airline's fleet offers SpiceMax, India's most spacious economy-class seating.
According to Quarterly Results, the company reported net sales of Rs 1,708 crore, operating profit of Rs 49 crore and net profit of Rs 158 crore in Q2FY25. In its annual results, the company reported net sales of Rs 7,085 crore, an operating loss of Rs 644 and a net loss of Rs 424 crore in FY24. The company has a market cap of over Rs 6,300 crore. Investors should keep an eye on this small-cap stock.
Disclaimer: The article is for informational purposes only and not investment advice.