A day after Jet Airways deferred its Q1 results, the shares of the airline nosedived 14 percent in the early trade. The shares opened on a weak note on NSE today at Rs 271.60, then plunged to as low as Rs 261.60, down 14.49 percent, to a 52-week low of Rs 258. In an exchange filing on Thursday, company said the audit committee didn’t recommend first quarter earnings to the board for approval “pending closure of certain matters”. The Jet Airways’ shares were trading at Rs 279.10, down 7.51 percent, on NSE at the time of reporting.
For some time now, the company is facing fiscal challenges. However, the company has time and again said it’s confident of reducing its operational costs. The airline earlier last week had denied media reports that it’s only left with cash just enough to run its operations for 60 more days.
“Today’s decline was mainly due to the company’s decision to defer the Q1 results which left the investors confused. The rising crude oil prices are further hampering the prospects. It would take around a year or such for the Jet Airways’ shares to recover,” says Aasif iqbal, Escorts Securities.
“The share price of Jet Airways took a severe sentimental hit when the company deferred its announcement of financial results for the Quarter ending June. The company has been facing financial woes and has lost over 65% on YTD basis making it one of the worst performer among aviation peers. In fact, post its IPO offering at Rs. 1100 in 2005, the stock has never traded above its offer price. The current financial woes and the deferment of the results have caused a sentimental hit to the prices where are anyway ruling weak. Though a strong technical support exists in the 248-268 range, it will be while before we see any meaningful recovery in the price. However, 245-248 may be seen as the immediate support base if the weakness persists,” says Milan Vaishnav, CMT, MSTA, Gemstone Equity Research & Advisory Services.
Jet Airways Chairman Naresh Goyal yesterday had said that he felt “guilty and embarrassed” since the investments of several of the shareholders faced decline in value as firm’s shares fell amid fiscal difficulties.