SpiceJet Q2 Results Review - Higher Yield To Nullify Fuel Inflation; Attractive Valuation: Reliance Securities

Reliance Securities Report

SpiceJet Ltd. reported revenue of Rs 19.5 billion (up 45% YoY and down 21% QoQ), 15.2% below our estimate of Rs 23 billion. Passenger revenue revenue per available seat-kilometer increased by 22% YoY in Q2 FY23.

Yield for the quarter improved by 11% YoY resulted into the increase in passenger revenue by 109% YoY. Ancillary revenue grew by 69% YoY in Q2 FY23. It reported an Ebitdar loss of Rs 5.4 billion (versus Ebitdar loss of Rs 1.3 billion in Q2 FY22 and Ebitdar loss of Rs 3.6 billion in Q1 FY23), versus our estimated loss of Rs 4.3 billion.

SpiceJet's Ebitdar margin stood at down 27.7% (down 1,795 bps YoY and down 1,312 bps QoQ), versus our estimate of down 18.5% due to higher aviation turbine fuel prices, led by a sharp jump in crude price and weaker rupee.

Its fuel cost/sales was up 1,700 bps YoY and up 565 bps QoQ to 62.8%. It recorded a net loss of Rs 8.4 billion (versus net loss of Rs 5.6 billion in Q2 FY22 and net loss of Rs 7.9 billion in Q1 FY23) including mark to market forex loss of Rs 2.6 billion, versus our estimated loss of Rs 9.5 billion, due to higher non-operating income, which grew six times QoQ.

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