ICICIdirect.com is bullish on SpiceJet and has recommended add rating on the stock with a target of Rs 80 in its September 20, 2010 research report.
"SpiceJet's board has approved the purchase of 30 Boeing 737-800 aircraft during 2014-2017 in order to expand the airline's operations on the domestic as well as international routes. The aircraft purchase deal is valued at ~Rs 270-300 crore. The airline is yet to come up with funding sources for its aircraft purchases. At the CMP of Rs 73, the stock is trading at 23.5x and 11.7x its FY11E and FY12E EV/EBITDA, respectively. In our view, the expanding domestic and international operations provide upside potential to the stock. Accordingly, we have valued the stock at 12.0x FY12E EV/EBITDA (9.4% higher than the FY12 EV/EBITDA multiple). We have revised our target price from Rs 72 to Rs 80 and changed our rating from STRONG BUY to ADD," says ICICIdirect.com research report.
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