Earnings take off: Jet Airways, SpiceJet shares fly high in sluggish market

Shares of domestic aviation companies sky-rocketed in early Wednesday trade despite the sluggish broad market sentiment, as strong earnings performance from SpiceJet and hopes of a similar performance from Jet Airways perked up investors sentiment. At 11.15 am, shares of Jet Airways shot up 10.5 percent to Rs 363.10 after gaining nearly 12 percent to touch a high of Rs 367. Nearly 6 lakh shares changed hands on the BSE so far against two-week average volume of 2.7 lakh shares. [caption id=“attachment_2369142” align=“alignleft” width=“380”] Reuters[/caption] According to an Edelweiss Securities report, Jet Airways is likely to post profit after tax of Rs 34 crore in the first quarter ended June 2015, against a loss of Rs 218 crore in the year ago period. Shares of low-cost carrier SpiceJet surged nearly 6 percent to a high of Rs 28.10 before trimming some gains to trade 5.3 percent higher at Rs 28. The counter also witnessed hectic trading activity, clocking volumes of over 1 crore shares against two-week average of 65.29 lakh shares traded. Today’s gains were in addition to yesterday’s upsurge that saw the stock end nearly 6 percent higher after the company reported second straight quarter of earnings. On Tuesday, the Gurgaon-based SpiceJet reported profit for the second straight quarter and clocked earnings of Rs 71.80 crore during the first quarter of the current fiscal over a net loss of Rs 124.1 crore during the same quarter last year. The company also reported industry-beating load factor of 89.8 percent for the quarter, while costs were down 42 percent due to reduction in capacity. Also, there are reports that oil marketing companies are likely to cut jet fuel prices amid weakness in crude prices, benefiting the airline companies as fuel contributes one-third of operational costs.