Prabhudas Lilladher's research report on SpiceJet
We cut SJET’s FY22/FY23 EBITDAR estimates by 81.4%/ 24.3% and downgrade the stock to ‘Hold’ given 1) Covid-19 2nd wave led turbulence delaying recovery by 6-8 months and 2) sharp rise in crude oil prices to negatively impact CASK. Despite RASK remaining flat, SJET’s adjusted losses widened sequentially to Rs3.8bn largely on account of input cost inflation (Fuel CASK grew by 33% QoQ). We expect SJET to operate at 51%/ 94% of pre-covid capacity in FY22/FY23.
Outlook
We value the stock at 8x FY23 adj. EV/EBITDAR and arrive at a target price of Rs85. We downgrade the stock to ‘Hold’ given twin headwinds in the form of delayed recovery in operations and rising crude oil prices.
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