Last updated: Nov 23, 2023 2:19 PM IST
Shares of SpiceJet continued their strong upward move for the third straight session on Thursday. The budget carrier’s shares hit a 52-week high of Rs 48.38, up 10 per cent on the BSE in intraday trade on Thursday, amid heavy volumes in an otherwise range-bound market. The airline’s shares traded higher for the third day in a row, rising 27 percent in the period.
The counter has risen 26.95 percent in the past month and 82.33 percent in six months.
SpiceJet, a low-cost airline, operates a fleet of Boeing 737s and Q-400s and is one of the country’s largest regional players operating multiple daily flights under UDAN or the Regional Connectivity Scheme. Most of the airline’s fleet offers SpiceMax, the most spacious economy class seating in India.
SpiceJet, called VS MSN 36118 CAY Designated Activity Company, on November 21 moved the Delhi High Court to implement a decree it obtained against the airline in Britain in June 2023.
The lessor is seeking to recover an amount of Rs 90 crore from SpiceJet by enforcing the judgment of the UK court. The HC has sought a response from the airline on the plea and the matter is likely to come up for hearing in February.
US MSN 36118 CAY Designated Activity Company, represented by senior advocate Rajshekar Rao and advocate Anandh Venkatramani, also asked the court to restrain SpiceJet from operating their aircraft, but the court has not passed any such orders for now. The judge has given the lessor permission to inspect the aircraft and check whether it is properly maintained.
Senior advocate Amit Sibal, appearing for SpiceJet, told the court that the airline will regularize its lease rental payments to the lessor from December.
SpiceJet signed a lease agreement with VS MSN 36118 CAY for a Boeing 737-700 in 2018. The term of the lease was 96 months and would expire in 2023. According to the landlord, SpiceJet has periodically defaulted on its payments since November 2020. Therefore, the landlord filed a plea in the United Kingdom for payment of the dues and also claimed future rent which allegedly became due due to an event of default.
The court in Great Britain awarded both past and future rents amounting to almost $5.89 million.
In terms of technical setup, support was seen on the counter at Rs 38 and resistance was seen around the Rs 48-odd zone. One analyst suggested booking profits at current levels.
Osho Krishan, Senior Research Analyst – Technical & Derivatives at Angel One, said: “SpiceJet has been gaining momentum in recent trading months. The counter is placed at the crucial point of resistance in the sub-zone Rs 43-45. A decisive breakthrough could only create momentum. On the other hand, the immediate support is around Rs 38, below which the counter may decline to Rs 34. It is advisable to adopt a cautious approach and keep a close eye on the mentioned levels.”
The scrip has an analyst target price of Rs 38, Trendlyne data shows, indicating a potential downside of 12 per cent in a year. It has a one-year beta of 0.3, which indicates low volatility on the counter.
