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H i g h e r p a s s e n g e r y i e l d s l e a d t o l o s s r e d u c t i o n …
SpiceJet’s revenues grew 41.5% YoY to | 1,175.8 crore during Q3FY12
on account of 29% YoY growth in passenger traffic along with a 9.5%
increase in the revenue per passenger. The growth was higher than our
estimates on account of a sharp increase in capacity (32% YoY jump in
ASKM) and higher than expected growth in yields (up 9.5% YoY to
| 3812) on account of supply cuts by other private carriers. As a result,
the load factor also improved sequentially by 1230 bps to 78.9%.
However, it remained lower compared to the same quarter last year. On
the cost front, higher fuel prices coupled with depreciation in rupee
during the quarter impacted margins negatively. Fuel costs in Q3FY12
were 90% higher than same period last year and constituted 50% of the
total operating costs in Q3FY12 as compared to 37% in Q3FY11. This, in
turn, put a major dent in its operating margin. Hence, the company
reported a net loss of | 39.3 crore vs. profit of | 94.4 crore last year.
Market share improves sharply on rise in capacity, supply cuts by other
players
SpiceJet’s market share for the quarter increased 250 bps YoY mainly
due to a 32% YoY increase in its capacity aided by supply cuts by other
private carriers. As a result, the company has been able to post revenue
growth of over 41.5% YoY vs. industry growth of 16% YoY.
Operating loss on higher fuel prices coupled with rupee depreciation
On the cost front, fuel costs recorded a sharp jump of 90% YoY. Its
proportion constituted 50% of total revenues for the quarter. This, in
turn, impacted margins and it continued to remain in the negative
territory despite a 9.5% YoY jump in passenger yields.
V a l u a t i o n s
We expect the fleet utilisation level to improve, going forward, due to
stable demand with limited supply. The company is focusing more on
new routes in Tier II cities with potential demand. Further, any positive
policy reforms would improve its earnings visibility, going forward.
However, rupee volatility remains a concern in the medium term. Hence,
we remain cautiously positive and maintain our target price of | 28 (i.e.
0.4x FY13E EV/sales) with a BUY rating
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
CLICK here for PDF post link
H i g h e r p a s s e n g e r y i e l d s l e a d t o l o s s r e d u c t i o n …
SpiceJet’s revenues grew 41.5% YoY to | 1,175.8 crore during Q3FY12
on account of 29% YoY growth in passenger traffic along with a 9.5%
increase in the revenue per passenger. The growth was higher than our
estimates on account of a sharp increase in capacity (32% YoY jump in
ASKM) and higher than expected growth in yields (up 9.5% YoY to
| 3812) on account of supply cuts by other private carriers. As a result,
the load factor also improved sequentially by 1230 bps to 78.9%.
However, it remained lower compared to the same quarter last year. On
the cost front, higher fuel prices coupled with depreciation in rupee
during the quarter impacted margins negatively. Fuel costs in Q3FY12
were 90% higher than same period last year and constituted 50% of the
total operating costs in Q3FY12 as compared to 37% in Q3FY11. This, in
turn, put a major dent in its operating margin. Hence, the company
reported a net loss of | 39.3 crore vs. profit of | 94.4 crore last year.
Market share improves sharply on rise in capacity, supply cuts by other
players
SpiceJet’s market share for the quarter increased 250 bps YoY mainly
due to a 32% YoY increase in its capacity aided by supply cuts by other
private carriers. As a result, the company has been able to post revenue
growth of over 41.5% YoY vs. industry growth of 16% YoY.
Operating loss on higher fuel prices coupled with rupee depreciation
On the cost front, fuel costs recorded a sharp jump of 90% YoY. Its
proportion constituted 50% of total revenues for the quarter. This, in
turn, impacted margins and it continued to remain in the negative
territory despite a 9.5% YoY jump in passenger yields.
V a l u a t i o n s
We expect the fleet utilisation level to improve, going forward, due to
stable demand with limited supply. The company is focusing more on
new routes in Tier II cities with potential demand. Further, any positive
policy reforms would improve its earnings visibility, going forward.
However, rupee volatility remains a concern in the medium term. Hence,
we remain cautiously positive and maintain our target price of | 28 (i.e.
0.4x FY13E EV/sales) with a BUY rating
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