Please Share:: 
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
L o w e r d o m e s t i c y i e l d s , w e a k r u p e e d e n t m a r g i n…
Jet Airways (JAL) reported consolidated revenues of | 4469.5 crore (up
13.1% YoY, 21.3% QoQ) that were marginally better than our estimated
revenues of | 4272.3 crore. However, high fuel prices and continued
depreciation of the rupee impacted its operating performance. As a result,
JAL reported a consolidated operating loss of | 67 crore. The domestic
segment (45% of topline) reported operating loss of | 101 crore due to a
marginal drop in yields (down 0.5% YoY) and higher fuel and other
operating costs due to sharp rupee depreciation. The international
segment (55% of total revenues) performed well with revenues in this
segment recording growth of 12% YoY and EBITDA of | 64.4 crore due to
balanced demand supply mix. Besides operational income, JAL earned a
profit of | 179 crore on sale and lease back transaction of aircraft engines
(| 76 crore) and sale of development rights of BKC land deal (| 103 crore).
In addition, JAL also adopted revised accounting guidelines for forex
transaction that resulted in unrealised gain of | 179 crore for the quarter.
This, in turn, helped the company to narrow its losses by | 360 crore for
the quarter.
ƒ Lower domestic yields along with weak rupee dent margins
During the quarter, yields for the domestic segment remained under
pressure partly due to competitive pricing strategy adopted by
major competitors and partly due to increase in the supply (ASKM).
As a result, Jet (domestic) and JetLite’s revenue per pax declined
4.8% and 0.9% YoY, respectively, despite healthy demand. A
weakening rupee also added further pain that in turn led fuel and
other operating cost to increase by 58% and 36% YoY, respectively.
V a l u a t i o n s
We expect the fleet utilisation level to improve by 7% in FY13E due to
stable demand and expected supply cuts by major players in the industry.
The company is focusing more on debt reduction through sale of its noncore assets and sale and lease back transaction of owned aircraft. Further,
we believe any positive policy reforms (like allowing direct import of ATF
or reduction in sales tax, etc.) would improve its earnings visibility further
over the longer term. However, a weak rupee remains a concern in the
short to medium term. Hence, we remain cautiously positive on the stock
with BUY rating and a target price of | 330 (i.e. at 1.0x FY13E EV/sales)
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
L o w e r d o m e s t i c y i e l d s , w e a k r u p e e d e n t m a r g i n…
Jet Airways (JAL) reported consolidated revenues of | 4469.5 crore (up
13.1% YoY, 21.3% QoQ) that were marginally better than our estimated
revenues of | 4272.3 crore. However, high fuel prices and continued
depreciation of the rupee impacted its operating performance. As a result,
JAL reported a consolidated operating loss of | 67 crore. The domestic
segment (45% of topline) reported operating loss of | 101 crore due to a
marginal drop in yields (down 0.5% YoY) and higher fuel and other
operating costs due to sharp rupee depreciation. The international
segment (55% of total revenues) performed well with revenues in this
segment recording growth of 12% YoY and EBITDA of | 64.4 crore due to
balanced demand supply mix. Besides operational income, JAL earned a
profit of | 179 crore on sale and lease back transaction of aircraft engines
(| 76 crore) and sale of development rights of BKC land deal (| 103 crore).
In addition, JAL also adopted revised accounting guidelines for forex
transaction that resulted in unrealised gain of | 179 crore for the quarter.
This, in turn, helped the company to narrow its losses by | 360 crore for
the quarter.
ƒ Lower domestic yields along with weak rupee dent margins
During the quarter, yields for the domestic segment remained under
pressure partly due to competitive pricing strategy adopted by
major competitors and partly due to increase in the supply (ASKM).
As a result, Jet (domestic) and JetLite’s revenue per pax declined
4.8% and 0.9% YoY, respectively, despite healthy demand. A
weakening rupee also added further pain that in turn led fuel and
other operating cost to increase by 58% and 36% YoY, respectively.
V a l u a t i o n s
We expect the fleet utilisation level to improve by 7% in FY13E due to
stable demand and expected supply cuts by major players in the industry.
The company is focusing more on debt reduction through sale of its noncore assets and sale and lease back transaction of owned aircraft. Further,
we believe any positive policy reforms (like allowing direct import of ATF
or reduction in sales tax, etc.) would improve its earnings visibility further
over the longer term. However, a weak rupee remains a concern in the
short to medium term. Hence, we remain cautiously positive on the stock
with BUY rating and a target price of | 330 (i.e. at 1.0x FY13E EV/sales)
No comments:
Post a Comment