SpiceJet shares jump 9%; check reason behind today's upmove & analyst views

Shares of budget carrier SpiceJet Ltd rose sharply in Tuesday's trade. The stock surged 9.45 per cent to hit a day-high value of Rs 63. Today's upward move in the share price came after the airline said it would expand its fleet by adding 10 aircraft.

"SpiceJet is set to significantly expand its fleet by the end of November with the induction of ten aircraft, marking a major step in the airline’s growth plans. Seven of these aircraft will be acquired on lease, while three previously grounded SpiceJet planes are being reintroduced into service," the carrier stated in a release.

"The airline has already signed agreements for the leased aircraft, with the full induction of all seven planes expected by November 15. Two of these leased aircraft have already arrived in India and are scheduled for immediate induction. SpiceJet will also operationalise its grounded planes in phases, with the first three set to re‐enter service before the end of November," it added.

This fleet expansion follows SpiceJet's successful qualified institutional placement (QIP), which raised Rs 3,000 crore. In addition to the QIP, the airline said it is set to receive an additional Rs 736 crore from a previous funding round.

Aviation regulator DGCA placed SpiceJet under enhanced surveillance after a recent audit revealed "certain deficiencies" at the end of August this year.

Technically, support on the counter could be seen at Rs 64, followed by Rs 60 level. On the higher end, it has the potential to hit an upside target of up to Rs 74.50.

Shiju Koothupalakkal, Technical Research Analyst at Prabhudas Lilladher, said the near-term target would be at around Rs 74 level with support maintained near Rs 60.

Kushal Gandhi, Technical Analysts at StoxBox, said, "The stock has shown increasing demand from buyers and price strength, bolstering its positive outlook. We recommend purchasing the stock with a target price of Rs 74.50 and maintaining a stop loss of Rs 63.50."

Sebi-registered research analyst AR Ramachandran said, "SpiceJet stock price has strong resistance at Rs 70. A daily close below support of Rs 64 could lead to a downward move towards Rs 53.5 in the near term."

The scrip traded lower than the 5-day, 10-, 20-, 30-day and 50-day simple moving averages (SMAs) but higher than the 100-day, 150-day and 200-day SMAs. The stock's 14-day relative strength index (RSI) came at 47.92. 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 15.90 against a price-to-book (P/B) value of (-)2.85. Earnings per share (EPS) stood at (-)3.62 with a return on equity (RoE) of 17.95.