Stock Under Rs 50: Company Reports Surprising Profit Turnaround Despite Revenue Decline
A major highlight was net profit, which turned positive at Rs 25 crore, marking a 108 per cent improvement YoY from a loss of Rs 301 crore in Q3 FY23.
SpiceJet Ltd has reported a remarkable turnaround in profitability in Q3 FY24 despite a sharp decline in revenue and ongoing challenges in the aviation sector.
Financial Performance
The company’s sales dropped 35 per cent YoY to Rs 1,237.0 crore, compared to Rs 1,914.4 crore in Q3 FY23e. However, Company’s Earnings before interest, taxes, depreciation and amortization (EBITDA) losses narrowed by 21 per cent YoY, improving from Rs -238 crore to Rs -188 crore.
A major highlight was net profit, which turned positive at Rs 25 crore, marking a 108 per cent improvement YoY from a loss of Rs 301 crore in Q3 FY23. Earnings per share (EPS) also improved significantly by 104 per cent, rising to Rs 0.19 from Rs -4.41 in the previous year’s quarter.
The profit turnaround was primarily driven by a sharp increase in other income, which grew 72.3 per cent YoY from Rs 242.1 crore to Rs 417.1 crore, offsetting the decline in operational revenue.
Stock Performance
Despite the improvement in profitability, the stock has been under pressure, falling 29.91 per cent over the past year, while Nifty declined 1.43 per cent during the same period. Over the last three years, the stock has fallen 23.74 per cent. The company’s market capitalization stands at Rs 5,886 crore.
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About the Company
SpiceJet Ltd is a leading low-cost airline in India, providing air transport services for passengers and cargo. The airline operates ~250 daily flights across 48 domestic and international destinations, with a fleet that includes Boeing 737 Max, Boeing 700, and Q400s.
It is currently the 5th largest player in the domestic aviation market with a 5.5 per cent market share in CY23, down from 10.5 per cent in CY21, primarily due to the grounding of 40 per cent of its fleet.
Despite market share challenges, the company has maintained one of the highest passenger load factors (PLF) in the industry. In Q2 FY24, its domestic PLF stood at 86.6 per cent, while in FY23, it recorded the highest domestic PLF of 88.6 per cent. In international operations, it also led the industry with a PLF of 84.9 per cent, ahead of Air India’s 83.1 per cent.
Disclaimer: This article is for informational purposes only and not an investment advice.