Buy JetAirways, target Rs 803: IL&FS

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Buy JetAirways, target Rs 803: IL&FS

IL&FS Investsamart has maintained buy rating on Jet Airways with target price of Rs 803. The 29% increase in Jet’s revenues was mainly attributable to a 121% surge in international sales, from Rs 4,019 million in Q3FY07 to Rs 8,863 million in Q3FY08.

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IL&FS Investsamart has maintained buy rating on Jet Airways with target price of Rs 803 in its February 06, 2008 report.  "The 29% increase in Jet's revenues was mainly attributable to a 121% surge in international sales, from Rs 4,019 million in Q3FY07 to Rs 8,863 million in Q3FY08. As a result, international revenues now account for about 37% of total revenues, up from 21% in Q3FY07. Going ahead too, we expect this steady momentum to be maintained, with maturing of recently launched routes and a number of new routes in the foray. During Q3FY08, Jet Airways posted a 29%YoY growth in net sales to Rs 24,260 million; this growth was driven by a 121% surge in revenues of the international segment. The airline's EBITDAR (profit before lease rentals) fell by 6% YoY to Rs 2,907 million; however, on a QoQ basis, the EBITDAR registered a strong growth, from Rs 245 million in Q2FY08 to Rs 2,907 million in Q3FY08. Addition of international fleet during the year increased Jet's interest and depreciation costs, leading to a fall in net profits. Currently, the stock is trading at an EV/EBITDAR of 11.4xFY09E. Considering the growth opportunities in the sector and Jet's strong operating capabilities, we continue to maintain a 'BUY' on the stock. At our target price of Rs1000, the stock trades at an EV/EBITDAR of 12.4xFY09E," says IL&FS Investsmart research. 

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