SpiceJet shares fell nearly 3 percent intraday on June 7 after global brokerage firm HSBC downgraded SpiceJet to reduce.
The stock was quoting Rs 144.65, down Rs 1.60, or 1.09 percent on the BSE, at 1125 hours. However, it rallied 71 percent in the last three months after Jet Airways suspended its operations and crude oil prices fell.
The brokerage maintained hold call on IndiGo operator InterGlobe Aviation which was trading at Rs 1,668.15, down Rs 2.70, or 0.16 percent.
HSBC said stocks are now trading at near all-time high valuation multiples. "Market is far too optimistic and ignoring risks and challenges."
However, the brokerage increased its price target for SpiceJet to Rs 115 from Rs 79.50 earlier and for InterGlobe Aviation to Rs 1,580 from Rs 1,100 apiece after an increase in earnings estimates.
"Consensus earnings forecasts for IndiGo increased by 136 percent and for SpiceJet by 56 percent," HSBC said, adding airfares have risen 12-15 percent over the past 4-5 months.
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