SpiceJet shares have extended their gain to the fifth straight day, surging nearly 25 per cent.
The outlook for aviation sector has improved after a fall in aviation fuel prices, which account for nearly 40 per cent of the operating expenses of airlines in India.
SpiceJet reported a net profit of Rs 71.8 crore for the June quarter, a big turnaround from the net loss of Rs 124 crore it recorded in the same quarter of last year.
During the June quarter, SpiceJet's revenue was at Rs 1,106 crore. This is 34 per cent lower than the same quarter of the last year as the airline cut capacity by nearly a third. However, costs for the quarter were down 42 per cent relative to same period last year. On a unit basis, revenue per available seat kilometer was flat year-on-year, while cost per available seat kilometer was down 13 per cent.
SpiceJet on Friday said it was in "exploratory and preliminary stage" talks with potential investors who have shown an interest in putting money into the airline.
What Analysts Say
Market analyst Rajat Bose said that after the sharp rally in SpiceJet shares, the near-term gains looks capped but on a medium term basis, the stock looks good on the charts.
Rajesh Baheti, MD of Crosseas Capital Services, has a positive outlook on SpiceJet shares in the near to medium term. "If oil prices are lower go long on airline stocks. Investors need to keep an eye on oil prices before investing in aviation stocks," he added.
