How Jet Airways stock has made investors lose Rs 7,035 crore in last one year
BusinessToday.In January 8, 2019
The Jet Airways stock has seen a turbulent flight during the last one year. The stock has lost 71.93% of its value during the period. The Jet Airways stock which hit an intra day and a 52-week high of 876.50 on January 8, 2018 has nosedived to 246 level during the period. On January 8 last year, the stock closed at 865.40 level.
The stock has lost 71.57% till date when we compare the fall from the closing price an year ago. Investors have lost Rs 7,035.7 crore on the Jet Airways stock counter during the last one year. On January 8 last year, the market capitalisation of the airline stood at Rs 9830.2 crore which has shrunk to Rs 2,794.50 crore today.
A string of poor quarterly performances led by a rise in jet fuel price, a fall in rupee, rising debt to purchase new aircrafts and the consistent price war among peers has contributed to the stock's decline in the last one year. On October 11 last year, the currency fell to an all time low of 74.48 level losing over 16.50% since the beginning of 2018.
On the other hand, Brent crude oil prices hit a new high of $86.29 per barrel on October 3, 2018.
The stock hit a speed bump after the airline reported a 45.9% fall in standalone net profit to Rs 165.2 crore in the third quarter of previous fiscal, hit by a sharp jump in the price of aviation turbine fuel. The stock which stood at 793 level on February 15, 2018 when Q3 earnings were announced fell to 743 level by the end of that month.
The poor financial performance marked the beginning of the slump in the stock price of the country's second-largest airline. Its financial position worsened in the next quarter when the Naresh Goyal-promoted airline reported a standalone net loss of Rs 1,036 crore in due to rise in oil prices and weaker rupee. The company had reported a net profit of Rs 602.42 crore in the year-ago period.
The stock plunged 7 percent to 391.55 after the dismal Q4 earnings performance. Adding to its woes, the airline deferred consideration of June-quarter results in the current fiscal. Addressing the shareholders, chairman Naresh Goyal said he felt "guilty and embarrassed" as shareholders had lost money, after airlines' shares plummeted due to the financial woes.
Subsequentially, the stock fell 13.29% intra day to 261.60 on August 10, 2018 compared to its previous close of 301.70.
In August end last year, crisis-ridden Jet Airways reported a massive loss of Rs 1,323 crore for the April-June quarter as high fuel prices, a weakening rupee and low fares battered the finances of the Naresh Goyal-led airline.
That was the second consecutive quarterly loss for the airline which had posted a profit of Rs 53.50 crore in the same quarter last year. On September 21, crisis-hit Jet Airways said income tax officials conducted a survey of its premises since September 19 and the shares plunged six per cent on the bourses. The airline, battling with financial woes, was already under the lens of Sebi and the corporate affairs ministry for various violations, including alleged corporate governance lapses.
The I-T department inspected the airline's books to ascertain whether there had been falsification of accounts, suspicious dealings and other possible violations. The scrip tumbled 5.96 per cent to close at Rs 229.70 on the BSE on the same day.
Since then the stock has pared some losses after reports said the Tata Group was considering to buy the carrier, and Etihad was likely to infuse additional funds into the airline.
However, the airline continued its poor financial earnings show when it announced its Q3 earnings on November 13, 2018. The airline reported its third consecutive quarterly losses for the quarter ending September, with a consolidated net loss of Rs 1,261 crore, roiled by higher fuel cost that soared 59 percent, and a steep rupee fall that led to a sevenfold spike in forex losses.
The Naresh Goyal-run airline, which is part-owned by Gulf carrier Etihad Airways, had posted a net profit of Rs 71 crore in the same period last fiscal.
On November 19, 2018, the stock saw some profit booking after its rose 41.13% in the last four sessions amid reports that Tata Group was likely to acquire the struggling carrier.
The airline had Rs 8,052 crore of debt on its books as on September 30. The huge debt has led to a back log of over two months in salary payments to its senior staff, including pilots and engineers. The full-service carrier, which has been grappling with financial woes for some time now, has been making delayed salary payments to its staff.
On January 2 this year, the shares of Jet Airways tumbled nearly 7 per cent after the crisis-hit firm defaulted on repayment of loans to a consortium of Indian banks. The stock fell as much as 1.5% to Rs 242.50 on BSE today after domestic and foreign lenders of Jet Airways asked the company to explain its liquidity situation, just a few days after the airline defaulted on a scheduled loan repayment, Mint reported. The stock which has fallen 12.47% in the last one week closed 0.43% lower at 245.20 today.
Edited by Aseem Thapliyal