• Rajasthan

    Cong 99
    BJP 73
    RLM 3
    OTH 24
  • Madhya Pradesh

    Cong 113
    BJP 110
    BSP 2
    OTH 5
  • Chhattisgarh

    Cong 68
    BJP 15
    JCC 7
    OTH 0
  • Telangana

    TRS-AIMIM 95
    TDP-Cong 21
    BJP 1
    OTH 2
  • Mizoram

    MNF 26
    Cong 5
    BJP 1
    OTH 8

* Total Tally Reflects Leads + Wins

After Delhi govt cuts VAT on ATF from 25% to 15, airline stocks skyrocket; TAAL Enterprises leads

By: | Published: March 9, 2017 4:27 AM

Shares of aviation companies rose between 1% and 9% on Wednesday after the Delhi government in its Budget for 2017-18 announced a big cut, from 25% to 1%, in the value-added tax on aviation turbine fuel (ATF).

Airline stocks rallied sharply led by the TAAL Enterprises, which ended 8.75% higher at R200.1 a share on the BSE. (PTI)

Shares of aviation companies rose between 1% and 9% on Wednesday after the Delhi government in its Budget for 2017-18 announced a big cut, from 25% to 1%, in the value-added tax on aviation turbine fuel (ATF).

Airline stocks rallied sharply led by the TAAL Enterprises, which ended 8.75% higher at R200.1 a share on the BSE. Other stocks such as Jet Airways, SpiceJet, InterGlobe Aviation and Global Vectra Helicorp were also among the gainers.

However, shares of Jagson Airlines underperformed on Wednesday’s trade by ending down 4.78% at R3.19 a share.

Of the 17 brokerages that track stocks of InterGlobe Aviation, 52.9% have given it a ‘buy’ rating, while 29.4% and 17.6% have given it ‘hold’ and ‘sell’ rating, respectively, according to Bloomberg data. Of nine brokerages that track Spicejet, seven have given it ‘buy’ rating and the rest opted for ‘sell’ rating.

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Currently, the price of the ATF in Delhi is around R54,294 per kilolitre.

As per ICRA estimates, the Indian aviation industry is likely to report a 22-23% passenger traffic growth in FY2017, supported by the prevalent low-airfare regime.

The Delhi government has announced the tax cut in order to improve NorthEast connectivity which comes under the Centre’s regional connectivity scheme (RCS).

Presenting the Delhi Budget for 2017-18, deputy chief minister Manish Sisodia said the cut in VAT on ATF will be applicable for direct flights between Delhi and remote areas identified under the RCS scheme as per prescribed conditions. Sisodia said the decision to cut the VAT on ATF will benefit people from the North East and other remote areas as fares under the RCS will come down significantly.

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