SpiceJet shares hit 1-yr low; stock crashes 48% YTD; is it time to add or avoid?

Shares of SpiceJet Ltd recorded a sharp drop in Tuesday's trade, plunging 6.98 per cent to hit a 52-week low of Rs 29.20. The stock was last seen trading 5.73 per cent down at Rs 29.59. At this level, it has cracked 47.55 per cent on a year-to-date (YTD) basis.

The Gurugram-based budget carrier today informed exchanges that it has achieved a second credit rating upgrade in a month, signalling the airline's improved credit profile, strengthened liquidity position and sustained focus on financial discipline.

Acuité Ratings & Research has upgraded the airline’s long-term credit rating to BB (Stable) from BB- (Stable). The short-term rating has been reaffirmed at A4+.

Acuité, a Sebi-registered credit rating agency, in a note highlighted SpiceJet's ongoing fleet induction plans, successful settlement agreements with key lessors and robust operational roadmap as critical factors behind the upgrade.

The agency had earlier upgraded the airline's long-term credit rating to BB- (Stable) and short-term rating to A4+. Following additional information and clarity provided by the airline, it has now upgraded the rating further to BB (Stable).

From a technical standpoint, SpiceJet shares may find support in the Rs 28–25 zone in the near term, while immediate resistance is likely around Rs 31 level.

Osho Krishan, Senior Analyst – Technical & Derivative Research at Angel One, said, "SpiceJet has been in a secular downtrend, placed below all its significant EMAs (exponential moving averages). The historical support of Rs 26-25 is likely to cushion the ongoing fall, while a further dip might disrupt the intermediate outlook. On the higher end, the zone of Rs 37-38 is likely to act as a sturdy hurdle in the near period."

Sebi-registered analyst AR Ramachandran noted, "SpiceJet's stock price is bearish on daily charts with strong resistance at Rs 31.7. A daily close below the support of Rs 28 could trigger a decline towards Rs 23 in the near term."

Jigar S Patel, Senior Manager – Technical Research at Anand Rathi, observed, "Support lies at Rs 27, with resistance at Rs 34. A breakout above Rs 34 could extend the rally towards Rs 40. The stock is expected to trade within the Rs 27–40 range in the short term."