SpiceJet shares plunged as much as 9.49 per cent on Friday despite the aviation major reported 225 per cent rise in net profit figures at Rs 73.19 crore for the quarter ended March 2016 against Rs 22.52 crore in the corresponding quarter last year. This is fifth straight quarterly profit for the company.
At 10.49 am, shares of SpiceJet were trading 6.98 per cent down at Rs 74. The scrip opened at Rs 77 and has touched a high and low of Rs 78.40 and Rs 72, respectively, in trade so far. Later, the scrip closed 10.37 per cent down at Rs 71.30.
According to market experts, one-time expense of Rs 173 crore ($25.69 million) towards “stabilising and improving the reliability of its fleet” that lead to 69 per cent slump in quarter-on-quarter profit, is a major disappointment and rising crude oil prices could cap future upside in the stock.
For the quarter ended March 2016, the carrier’s total expenditure went up by 66.83 per cent to Rs 1,432.94 crore from Rs 858.92 crore in the same quarter last year.
G Chokkalingam, founder, Equinomics Research & Advisory, said, “Shares of SpiceJet should have fallen on the day when they announced Rs 500 fare. Increase in competition has come at a time when oil price shot up 70 per cent from record low in March quarter.”
On a year-to-date basis, shares of the company plunged 3.40 per cent to Rs 79.55 till May 19, whereas BSE Sensex dipped 2.91 per cent during the same period.
(With agency inputs)