Edelweiss is bullish on Jet Airways has recommended buy rating on the stock with a target price of Rs 615 in its research report dated June 19, 2017.
Edelweiss' research report on Jet Airways
Jet Airways’ (JAL) Q4FY17 consolidated revenue, at INR 57.3bn, grew 3.5% YoY as the 8% RPKM spurt was compensated by 4% correction in passenger yield. Despite improvement in non-fuel costs (CASK, excluding fuel, down 5% YoY), spurt in fuel cost led to EBITDAR margin plummeting 1400bps to 13%. As a result, PAT plunged 95% YoY to INR 23mn.
Going ahead, improvement in profitability hinges on yield stabilisation and sustained drop in non-fuel costs & debt. We factor in lower growth and impact on yield versus peers. We value JAL at 7.0x FY19E EV/EBITDAR yielding revised target price of INR 615. Maintain ‘BUY’.
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