SpiceJet | Stock Performance Analysis | Market Update

SpiceJet settles dispute worth Rs 413 crore; shares rally over 5% in morning trade

This marks SpiceJet’s third significant resolution in recent times, following successful fundraising, resulting in a cumulative savings of Rs 685 crore.

SpiceJet, the second-largest airline company in India is engaged in providing air transport services for the carriage of passengers and cargo. The company announced a successful settlement of the company’s major dispute with one of its clients, which will save a significant amount of money for the company.

Settlement Details

As per the press release, SpiceJet announced the successful resolution of a USD 49.8 million or Rs 413 crore dispute with Echelon Ireland Madison One Limited. The resolution with Echelon Ireland Madison One Limited stands out for its substantial impact on SpiceJet’s financial landscape.

The successful negotiation has secured a remarkable USD 48 million or Rs 398 Crore in cost savings for the airline. As part of the settlement, SpiceJet will acquire two airframes, a move aimed at enhancing the airline’s fleet and operational capabilities.

This marks the third major resolution for SpiceJet in a short span, following successful fundraising endeavours. The aggregate savings from these settlements amount to an impressive Rs 685 Crore, reinforcing SpiceJet’s financial stability and bolstering its balance sheet.

Recent Settlements

This accomplishment follows SpiceJet’s mutually agreed settlement of a USD 29.9 million or Rs 250 Crore dispute with Celestial Aviation on February 28, resulting in savings of Rs 235 Crore. Shortly thereafter, on March 5, the airline reached settlement terms with Cross Ocean Partners, resolving a dispute of about USD 11.2 million Rs 93 Crore.

The agreement with Cross Ocean Partners also includes the transfer of an airframe and an engine at no additional cost, further augmenting SpiceJet’s operational capabilities.

Share Performance

The stock opened trading at Rs 62 per share on the BSE, higher compared to the previous day’s closing price of Rs 61.92 per share. It reached intraday highs and lows of Rs 65.40 and Rs 62, respectively. Currently, the stock is trading at around Rs 63.80 per share, which is 3% higher than the last day’s closing price on BSE.

The stock’s all-time high price is Rs 156.90 per share, and as per the current market price, it is trading 145% down from its all-time high price. Additionally, the company’s stock has delivered a return of over 57% in the past six months and around 75% in the past year.

The current market capitalisation of the company stands at Rs 4,367 crore on the BSE.

Investors must keep this stock on their radar.

Disclaimer: This post has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. It is based on several secondary sources on the internet and is subject to changes. Please consult an expert before making related decisions.