SpiceJet a market performer: Karvy

Karvy Stock Broking has downgraded its rating on SpiceJet from buy to market performer with a target price of Rs 33 in its July 8, 2008 research report. "SpiceJet's reported disappointed 4QFY08 results with sales below our expectation and net loss above our expectations. SpiceJet reported sales of Rs 3,993 million which was 70% higher over 4QFY07 revenues of Rs 2,353 million but was lower than our expectation of Rs 4,352 million. Lower aircraft utilization of 9.2 hours during the quarter (versus 10.2 hours during 4QFY07) resulted in lower departures and subsequently lower than expected revenues. SpiceJet reported load factor of 66.6% as against our expectation of 68.7%."

"We are introducing FY10E estimates and after assuming load factor of 65.3%, ATF price of Rs 55,000 KL and period end fleet size of 18, we expect the company to generate revenues of Rs 22,904 million, EBITDA of Rs 1,244 million and net profit of Rs 1,166 million. Due to lower than expected results and lowering of FY09 estimates, we are reducing our price target by 34% from Rs 50 to Rs 33 and downgrading our recommendation from BUY to Market Performer," says Karvy's research report.

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