Airline Stock Under Rs 50 Will Be in Focus Tomorrow as Company Reports a Turnaround Net Profit of Rs 26 Crore in Q3FY25
Additionally, the company spent Rs 170 Crore on ungrounding aircraft, which likely contributed to the improved operational efficiency.
The stock market is closed today, February 26, 2025, in observance of Mahashivratri. Regular trading will resume tomorrow, February 27, 2025. Airline stock, which closed at Rs 47.97 per share on February 25, 2025, will be closely watched tomorrow following the company's announcement of stellar Q3FY25 results, including a turnaround net profit of Rs 26 crore.
In Q3FY25, the company demonstrated a remarkable turnaround, achieving a net profit of Rs 26 crore compared to a net loss of Rs 300 crore in the same period last year. This positive shift is attributed to strong financial performance, including total revenue of Rs 1,651 crore, an EBITDA of Rs 210 crore, and a positive net worth of Rs 70 crore. The company also achieved an impressive Passenger Load Factor of 87 per cent and a Total passenger RASK of Rs 4.57. Additionally, the company spent Rs 170 crore on ungrounding aircraft, which likely contributed to the improved operational efficiency.
For the nine-month period of FY25, the company significantly reduced its losses to Rs 267 crore compared to Rs 528 crore in the same period last year. EBITDA saw an improvement, reaching Rs 401 crore (Rs 524 crore excluding forex impact) versus Rs 385 crore (Rs 466 crore excluding forex) in the prior year. Total revenue for the period reached Rs 3,838 crore. The company also demonstrated strong operational performance with an impressive Passenger Load Factor of 88 per cent and a total passenger RASK of Rs 4.60.
The company achieved significant progress in debt resolution this year, settling multiple outstanding disputes with aircraft and engine lessors. Agreements with lessors like Aircastle, EDC, Carlyle Aviation, Genesis, Cross Ocean, Echelon, BBAM, and Wilmington Trust, along with engine lessors ELFC, Shannon Engineering Support, Willis, and MTU, resulted in a total settlement of Rs 1,700 crore for Rs 1,233 crore, yielding a financial benefit of Rs 467 crore. The company is actively engaged in discussions with other lessors to resolve remaining disputes amicably. These efforts, combined with improved financial performance, led to credit rating upgrades, with Acuité raising its rating by four notches to B+ (Stable Outlook) and CARE Ratings assigning a BB- (Stable Outlook).
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Beyond debt resolution, the airline achieved several operational and strategic milestones. A successful Rs 3,000 crore QIP, attracting prominent investors, significantly bolstered the company's financial standing. This funding enabled the clearance of Rs 601 crore in GST, TDS, and EPF statutory dues, the induction of 10 aircraft (including 3 previously grounded), and ongoing efforts to unground additional aircraft. The airline secured rights to operate Haj flights from four key cities in Q1FY26, partnered with StandardAero Inc. to expedite the return to service of 737-8 MAX aircraft, and expanded its network with 60 new flights (32 for the winter schedule), including enhanced regional connectivity under UDAN and special flights for the Maha Kumbh 2025. These achievements demonstrate the airline's commitment to financial stability, fleet modernization, and expanding its operational footprint.
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 6,000 crore.
The stock that will be in focus tomorrow is SPICEJET LTD.
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. The majority of the airline's fleet offers SpiceMax, the most spacious economy-class seating in India. Investors should keep an eye on this small-cap stock.
Disclaimer: The article is for informational purposes only and not investment advice.