SpiceJet Shares Witness Profit Taking After Sharp Rally

SpiceJet shares turned flat in noon trade today after gaining as much as 7 per cent to Rs 69.80. In last two trading sessions including today, SpiceJet shares had rallied nearly 24 per cent. 

Investors piled into SpiceJet shares after the budget airline announced that its June quarter profit more than doubled to Rs 149 crore on strong operational performance. 

SpiceJet's revenue increased 37 per cent to Rs 1,522 crore compared to Rs 1,113 crore in the corresponding quarter of last fiscal. 

SpiceJet recorded a passenger load factor of 92.5 per cent in Q1, the highest in the industry, the airline said. For SpiceJet, the passenger load factor has been in excess of 90 per cent in every month since April 2015. 

Traders said that profit-taking after 24 per cent rally hurt the momentum in SpiceJet shares. 

Meanwhile, global brokerage CLSA has maintained a "sell" call on SpiceJet with a target price of Rs 35, despite the airline's strong June quarter earnings. 

CLSA said that SpiceJet's best quarter is behind with the Q1 results and future earnings trend would look different. 

CLSA has valued SpiceJet shares at 8 times its EV/EBITDA (enterprise value/operating profit). 

SpiceJet shares closed 1.99 per cent lower at Rs 64.00 compared to 0.39 per cent gain in the broader Nifty.