Thursday, October 28, 2010

SPICE JET - MOVING TO THE NEXT ORBIT



Spicejet is one of the big success stories in aviation industry of India in recent past.This best low cost airline in South Asia was originally promoted by Ajay Singh and the Kansagra family . Currently Spicejet claims a 12 % market share in Indian aviation industry. Recent entry of Kalanidhi Maran as the main promoter is expected to take the company to the next level. Financial muscle and other influence of the new promoters are expected to help the company which operates in a highly regulated industry. Aviation Industry is showing some early signs of revival worldwide . When we take it in Indian perspective,there are two positive factors .First one is the comparatively better situation of growth in Indian industry as a whole, which will ensure higher business travels . On the other side , since the world economy is still under stress, the price of ATF  is not going beyond affordable  level. Company recently started its international operations with the launch of Chennai-Colombo and Delhi-Kathmandu routes  and the new management is expected to pay much attention in this line .  Mr Neil Mill has recently appointed as the new CEO of  Spiceject. He is coming to the company with a 12 year experience with ' easyJet'  one of  the Europe’s  most successful low cost carriers.He  also worked with  'Fly Dubai' , the state-run low cost carrier of Dubai. Spiceject has taken various efforts in recent past to cut cost  and improve load factor .Even if its equity will be increased after the conversion of warrants ,Spicejet is  expected to generate higher profit and scale the business to new levels which will justify the increase in equity. In last September quarter, company posted a loss of Rs.101 Cr ,but this time it is expected to post profit at net level.
One may hold at current level and take any correction as an opportunity to BUY for long term. Keep an eye on the movement of the price of ATF which is one of the crucial factor affecting the profitability of airline industry. CMP is Rs.86/-

5 comments :

  1. GOVIND RUBBER - GOOD PEDIGREE

    Govind Rubber is a member of Siyaram Poddar Group.Other companies
    of the same management is Balkrishna Industries and Siyaram Silk Mills.
    Company’s brand ‘INTERNATIONAL’is well accepted in Cycle and
    Three wheeler tyre segment.Special purpose tyres are the other key
    strength of the company which includes tyres for Trailer,Forklift, Tractor
    and other Farm equipments. Company’s performance is expected to be
    encouraging due to revival of demand in all these sectors. Increasing natural
    rubber price is the major concern ,but good demand helping the company to
    pass on the same to its customers and any drop in NR price will help the
    company to improve it margins going forward. Keep an eye on this
    one,which is currently trading around Rs.20 /-

    ReplyDelete
  2. Sir
    Can you please repeat update on Govind rubber.

    Thanks

    ReplyDelete
  3. is duncans industries a good turnaround story?

    ReplyDelete
  4. Value pick
    my simple question is, what price have you picked the stock at ( spice jet )?? are u purchasing it now or you bought it 2 months back and are posting the blog now??

    ReplyDelete
  5. Dear Friend
    Why you are so much worried about my purchase price rather than the valuation and potential of the company ??

    ReplyDelete

Followers

Tweet TopOfBlogs