Please Share:: 
India Equity Research Reports, IPO and Stock News
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
Aviation
ƒ Passenger volume growth and capacity addition to drive topline
Domestic passenger traffic will continue to witness healthy growth of
18.7% compared to last year. However, the same is expected to decline
sequentially by 7.1% during July-September 2011 due to the lean
season. Air fares remained flat during Q1FY12. However, they started
inching up from July onwards in order to partly offset soaring fuel
prices. Still, yields per ASKM continued to remain under pressure on
account of increase in capacity. Overall, we expect our I-direct aviation
universe to report revenue growth of 17% YoY, down 5.8% QoQ.
ƒ Higher fuel costs, lower PLFs on higher capacity to dent margins
Notwithstanding a healthy growth in sales, the aviation sector’s losses
are expected to deepen in the Q2FY12. This is likely to be effected by
the inability of carriers to completely pass on higher fuel costs to its
customers, in the background of the lean season and lower load factors
due to increased capacity addition. Average fuel prices declined 4.8%
QoQ to | 60,080 per kl. However, it continued to remain higher.
Considering this, we expect the overall aviation universe’s operating
margin of negative 3% for the quarter.
ƒ Net loss to widen further despite debt restructuring
Although the debt recast and conversion of rupee loans to US dollar
loans are expected to help the sector reduce its interest outgo by
11.4%, it will not suffice in reducing net losses. The industry’s net loss
as a proportion of income is expected to widen to 9.5% in Q2FY12E
from 4.9% last year.
Exhibit : Company specific view
Company Remarks
Jet Airways Revenues are expected to grow 10.8% YoY vs. last quarter's growth of 15.4% due to
seasonal impact. Although Jet has retained its dominance by targeting the LFC
segment and reducing its expenses (ex-fuel), its operating margins are expected to
remain under pressure due to lower yields and higher fuel prices
SpiceJet Revenues are expected to grow by 42.6% in Q2FY12E (higher than other airlines in our
coverage) due to an increase in the capacity. However, margins are expected to
remain muted due to lower sales and rising fuel prices as LFCs are more susceptible
to rising fuel prices than FSCs
KFA KFA is expected to report 18% YoY air passenger growth due to the recovery of its
grounded aircraft. While margins will get impacted sharply due to soaring fuel prices,
interest cost saving of ~| 24 crore on account of debt restructuring would help it in
reducing its losses to some extent
Source: Company, ICICIdirect.com Research
Click on link below for details of all sectors
No comments:
Post a Comment