SpiceJet share price dips 8% despite ₹26 crore profit in Q3FY25; here’s what Nuvama suggests

SpiceJet share price plunged over 8 per cent in Thursday's trading session despite the aviation company posting a ₹26 crore profit in Q3FY25. This represents a notable recovery from the ₹300 crore loss reported in the same period last year.

The low-cost airline credited its return to profitability to robust passenger demand, increased operational efficiency, and better yield management.

SpiceJet's total revenue climbed 35% year-on-year to ₹1,651 crore in Q3, while its passenger load factor (PLF) remained steady at 87 per cent, reflecting consistent occupancy levels.

In the quarter, the airline secured ₹3,000 crore from qualified institutional investors, boosting its liquidity. This fund infusion helped SpiceJet attain a net worth of ₹70 crore, marking its first positive balance in a decade.

“This quarter’s performance is a testament to SpiceJet’s resilience and our relentless focus on financial and operational recovery. For the first time in a decade, the company has turned net worth positive – an important milestone that underscores the success of our turnaround strategy. The past is behind us, and we are now firmly focused on building a stronger, more resilient future for SpiceJet,” said Ajay Singh, Chairman and Managing Director, SpiceJet.

Furthermore, the company earmarked ₹170 crore for restoring grounded aircraft to service, a key move to enhance capacity and optimize fleet utilization.

In Q3, Revenue Available Per Seat Kilometre (RASK) was ₹4.57. Moving forward, the airline expects sustained strong demand and network optimization to support double-digit growth in RASKs during Q4 of FY25 compared to the previous year.

Following the earnings announcement, shares of SpiceJet tumbled as much as 8.17% to the day's low of ₹44.05 on the BSE in intra-day trade today. The stock opened at ₹48.06, slightly higher than the previous close of ₹47.97 but soon came under heavy selling pressure.

Should you buy or sell?

Brokerage firm Nuvama Institutional Equities has retained a ‘hold’ rating on the SpiceJet stock, however, it reduced the target price by 14 per cent to ₹52.

“We are cutting FY25E/26E EPS by 14%/13% and TP by 14% to INR52 (roll forward to Q3FY27) as we lower EV/EBITDAR multiple to 7x (from 9x, in-line with IndiGo) and lease rentals multiple to 6x (from 7x, in-line with IndiGo). Retain ‘HOLD’,” the brokerage firm said in a note.

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