Shares of SpiceJet Ltd recorded a sharp downtick in Friday's trade after aviation regulator DGCA placed the budget carrier under "enhanced surveillance" with immediate effect. The stock dived 6.39 per cent to hit a day low of Rs 62 over its previous close of Rs 66.23.
The Directorate General of Civil Aviation (DGCA) announced that SpiceJet has been placed under "enhanced surveillance with immediate effect". This decision has been taken to implement increased spot checks and night surveillance to uphold the safety standards of the airline's operations.
"In light of the past record and the special audit carried out in August 2024, SpiceJet has once again been placed under enhanced surveillance with immediate effect. This would entail an increase in the number of spot checks/ night surveillance with a view to ensure the safety of operations," DGCA stated in a release.
DGCA mentioned it conducted a special audit of the airline's engineering facilities on August 7 and 8 and certain deficiencies were found during the special audit.
"It may be recalled that after a series of occurrences reported on the SpiceJet fleet in 2022, a special drive of spot checks was undertaken during which SpiceJet was permitted to release aircraft for operations only after confirming to DGCA that all reported defects/ malfunctions had been rectified. During the year 2023, based on reports of the airline being under financial stress, it was again placed under enhanced surveillance," it added.
SpiceJet, which is facing financial challenges, has encountered difficulties with aircraft lessors and several airports. The airline, currently involved in the process of raising funds through a qualified institutional placement (QIP) route, has also faced issues regarding timely salary disbursements.
The airline reported a 19.65 per cent drop in consolidated profit for the June 2024 quarter (Q1 FY25). The carrier's profit came at Rs 158.75 crore in Q1 FY25 as against Rs 197.58 crore in the year-ago period.
During Q1 FY25, the airline's revenue from operations also took a hit and slipped 14.15 per cent to Rs 1,646.21 crore from Rs 1,917.43 crore in the corresponding period last year.
Technically, the scrip traded lower than the 5-day simple moving average (SMA) but higher than the 10-day, 20-, 30-, 50-, 100-, 150-day and 200-day SMAs. The stock's 14-day relative strength index (RSI) came at 46.98. A level below 30 is defined as oversold while a value above 70 is considered overbought.
As per BSE, the carrier's stock has a negative price-to-equity (P/E) ratio of 12.83 against a price-to-book (P/B) value of (-)2.03. Earnings per share (EPS) stood at (-)5.16 with a return on equity (RoE) of 15.83.
Around 54.08 lakh shares were last seen changing hands today on BSE. The figure was lower than the two-week average volume of 77.16 lakh shares. Turnover on the counter came at Rs 34.10 crore, commanding a market capitalisation (m-cap) of Rs 4,947.83 crore.
As of June 2024 quarter, promoters held a 47.66 per cent stake in the airline.