You are here: Home » Companies » Industry
Business Standard

Airline stocks tumble amid rising fuel prices; InterGlobe's shares tank 20%

A day after InterGlobe Aviation announced its results, SpiceJet shares tumbled over 6% but managed to close in the green

Press Trust of India  |  New Delhi 

InterGlobe, airline stocks, fuel prices, crude oil, airlines shares, spicejet, jet airways, civil aviation, interglobe q4, interglobe q4 results

Stocks of airlines have hit some air pockets, slumping up to 20 per cent in just three trading sessions this month amid rising and weak quarterly earnings of InterGlobe Aviation impacting investor sentiment.

Among the three-listed airlines, and are yet to announce their fourth quarter and full year results for 2017-18.

On May 2, InterGlobe, which operates the country's leading carrier IndiGo, reported 73 per cent decline in profit after tax (PAT) to Rs 1.17 billion for the March quarter as higher and loss took a toll on its bottom line.

There are concerns that spike in global may also put pressure on the profits of other airline companies, according to analysts.

In May, which so far had three trading sessions, shares of InterGlobe Aviation have tumbled 15.57 per cent on BSE. Shares of have dropped 20 per cent while those of have seen a volatile trend.

A day after InterGlobe Aviation announced its results, shares of tumbled over 6 per cent but managed to close in the green.

Together these three airlines - InterGlobe Aviation, and SpiceJet -- have seen an erosion of Rs 100.5 billion from their market valuation so far this month.

ALSO READ: The IndiGo drama

"This week has witnessed a slump in aviation stocks, the biggest in recent history. At last reality dawned on the aviation sector which was trading lofty valuations. There are certain industry-specific factors that are hampering growth," SAMCO Securities Founder & CEO Jimeet Modi said.

He noted that airports in the tier-I cities have limited capacity and infrastructure to handle an additional pipeline of scheduled flights. This capacity constraint along with jet would be a huge setback for the aviation players causing a dent to their bottom-line, he added.

InterGlobe Aviation announced its latest results post market hours on May 2. On that day, its shares declined nearly 4 per cent and the next day, the scrip fell 10 per cent.

First Published: Sun, May 06 2018. 13:24 IST