Jet Airways surged nearly 8% on Friday amid high volume after the company turned to profit in the first quarter ended June 30, helped by higher revenues and increase in passenger traffic.
The scrip ended at R400.20, up R29.45, or 7.94%, from the previous close. More than 80 lakh shares exchanged hands on the BSE and the NSE, nearly three times the average volume in the last 30 sessions.
Jet, which is India’s second largest carrier by market share, on Friday reported a consolidated net profit of R226.4 crore in the three months ended June 2015 compared to a loss of R258 crore in the corresponding period last year. First quarter revenue grew 11% y-o-y to R5,658 crore.
Analysts had estimated the Naresh Goyal-promoted Jet to post a net loss of R53.70 crore on net sales of R5,252.30 crore, showed a Bloomberg poll. Despite rapidly rising demand for air travel in India, Jet has not made an annual profit since 2007, dragged into the red by high operating costs and fierce competition for passenger fares.
A drop in fuel prices has, however, eased the squeeze on Indian airlines this year — low-cost rival SpiceJet swung to a small net profit in the last quarter — but analysts say ticket prices are still too low and costs too high for sustained profitability.
The Mumbai-based airline, in which Abu Dhabi’s Etihad owns 24% stake, announced a cost-cutting plan last year and said it expected to make a full-year profit in 2017. The improved performance provides further evidence of the growing momentum of the three-year turnaround, Jet Airways said in a statement. The airline saw 60 lakh international passengers travelling on its flights during the 2014-15 financial year, becoming the largest carrier in terms of international traffic from India, according to aviation consulting firm Capa India.