March 01, 2017 / 13:22 IST
Jet Airways’ (JAL) Q3FY17 consolidated revenue, at INR 54.8bn, was flat YoY as the 5% RPKM growth was compensated by the 4% correction in passenger yield. Despite improvement in non-fuel costs (CASK - ex fuel down 1.7% YoY), spurt in fuel cost saw EBITDAR margin dipping by 680bps to 15.8%.
Outlook
As we roll over to FY19E, we factor in lower growth and impact on yield (driven by focus on international operations) versus peers, Indigo and SpiceJet. We value JAL at 7.0x FY19E EV/EBITDAR giving us a revised target price of INR 542 (INR 529 earlier). Maintain ‘BUY’.
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