SpiceJet shares snap two-day fall, rise 4% today after airline pays Credit Suisse. Technical analyst views

Shares of SpiceJet Ltd traded higher in Friday's trade, halting their two-day losing run. The stock today jumped 4.22 per cent to hit a day high of Rs 40 over its previous close of Rs 38.38. In an exchange filing, the budget carrier said, it has complied with the directive of the Supreme Court by remitting $1.5 million to Credit Suisse. The payment was executed on September 14, it added. Credit Suisse and SpiceJet have been engaged in a legal dispute since 2015 over the bank's claim of unpaid dues.

The carrier has been facing multiple headwinds such as insolvency pleas and court cases from shareholders.

In a separate case, the cash-strapped carrier was ordered to pay Rs 100 crore to its former owner, Kalanithi Maran (Kal Airways), by September 10 as part of an arbitration order in a separate case.

In response, SpiceJet said it had deposited Rs 77.5 crore of that amount. The airline also mentioned it would complete the payment of Rs 22.5 crore to Maran by Tuesday (September 12).

Recently, the airline said it has obtained an extension of up to three months from the Registrar of Companies (RoC), under Section 96 of the Companies Act, 2013, for conducting the annual general meeting (AGM) for the financial year ended March 31, 2023 (FY23). Accordingly, the AGM for FY23 will be held on or before December 31, 2023, the airline added.

The carrier has also announced the allotment of 4.81 crore equity shares on a preferential basis to nine of its aircraft lessors to clear outstanding dues of Rs 231 crore. The airline's board has also approved the allotment of 3.41 crore shares equity shares and 13.14 crore warrants at an issue price of Rs 29.84 each to promoter Ajay Singh's group Spice Healthcare.

On technical setup, the counter was last seen trading lower than the 5-day simple moving average (SMA) but higher than the 10-day, 20-, 30-, 50-, 100-, 150- and 200-day SMAs. The counter's 14-day relative strength index (RSI) came at 66.87. A level below 30 is defined as oversold while a value above 70 is considered overbought. The company's stock has a negative price-to-equity (P/E) ratio of 5.15 against a negative price-to-book (P/B) value of 0.44.

The scrip has an analyst target price of Rs 32, Trendlyne data showed, suggesting a potential downside of 17 per cent. It has a one-year beta of 0.72, indicating low volatility on the counter.

"The stock faces resistance at Rs 42.45. A daily close below support of Rs 35 could lead to target of Rs 30.8 in the near term," said Pavitraa Shetty from Tips2trades.

"For SpiceJet, one can expect a near-term target of Rs 43. Maintain a stop loss at Rs 27. A 5 to 10 per cent pullback is normal in such a movement. So, keep a view of averaging too," said VLA Ambala, research analyst at Stock Market Today.

"The counter may touch Rs 45 level in near term," market expert Ravi Singh.

The private airline reported a net profit of Rs 205 crore for the quarter ending June 2023 (Q1 FY24) as compared to a loss of Rs 789 crore in Q1 FY23 due to strong air travel demand.

In the March 2023 quarter (Q4 FY23), the airline posted a net profit of 17 crore against a loss of Rs 458 crore in Q4 FY22. In FY23, SpiceJet said it lowered its losses to Rs 1,503 crore against to Rs 1,725 crore in FY22. For the same comparative period, it reported operating revenue of Rs 8,869 crore in FY23 as against Rs 6,557 crore in FY22.

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