Bear of the day: Stock that lost 41% in 2 months

Rising crude oil and air turbine fuel prices have put a lid on stock prices of Jet Airways, which was down a further 0.68% or Rs 3 today to end at Rs 441 on the BSE. It touched an intraday high of Rs 467 and an intraday low of Rs 439.55. There were pending sell orders of 200 shares, with no buyers available. The total traded volumes were of 374,852 shares. However, till now the stock has plunged 41.80% from 31 December 2010.

The stock has lost over 41% in the last two months. It touched its 52-week high Rs 926.35 and 52-week low Rs 392.10 on 10 Nov, 2010 and 24 Feb, 2011, respectively. Currently, it is trading -52.39% below its 52-week high and 12.47% above its 52-week low. Its market capitalisation stands at Rs 3,807.33 crore.

The company's trailing 12-month (TTM) EPS was at Rs 22.32 per share. The stock's price-to-earnings (P/E) ratio was 19.76. The latest book value of the company is Rs 95.79 per share. At current value, the price-to-book value of the company was 4.6.

Oil on the boil:

Crude prices have risen exponentially since the onset of the crisis in the Middle East. With crude at over USD 100 per barrel and mounting revenue losses for public sector oil companies, another hike in petrol and diesel prices is imminent. Aviation turbine fuel, a specialised form of petroleum-based fuel has gone up recently putting pressure on carriers like Jet Airways. A further hike in aviation turbine fuel also cannot be ruled out.

Jet Airways had increased fuel surcharge by up to Rs 200 on February 24. The company charged an additional Rs 100 for travel under 1000 km and Rs 200 for travel above 1000 km.

Earlier on January 17 oil marketing companies raised jet fuel prices, which account for 40% of airlines' operating costs, for the seventh time since October when international crude oil prices started rising sharply. The rates of aviation turbine fuel in Delhi went up by 2%. The hike came on the back of a Rs 935 per kilolitre hike on January 1 and a 3.6% increase on December 15.

Crude prices have risen astronomically from December 2010. International prices have risen almost 20% over the last three months. The recent crises in Egypt and Libya has seen oil boil to over the USD 100 per barrel mark from around the mid-80s that it was trading in December.

December quarter results:

The company's December quarter net profit however was up 12% at Rs 118. 23 crore as compared to Rs 106 crore, YoY, on the back of strong holiday season sales. Its Income from operations was up 20% at 3260 crore versus 2720 crore, YoY. Its EBIDTA margins was at 24.5% for Q3. The company's margins came in at 24.5%

What analyst says:

On February 25, 2011 Mitesh Thacker, Technical Analyst, miteshthacker.com told CNBC-TV18, "For Jet Airways around Rs 400 is an important support area. I think we saw a low of about Rs 392 today. I think that is a very critical support point."

He further added, "On a weekly closing basis, we have seen some important lows earlier formed at levels of Rs 400. So there could be good short covering happening. There could be some kind of fresh buying happing around these levels. The down trend is over in the stock price for some time. You would see Rs 400 as a good temporary bottom."

Peer comparison: