CLSA Cuts Tar­get Price on Jet Air by 21% to 300

The Economic Times - - Smart -

Mum­bai: For­eign bro­ker­age CLSA slashed its tar­get price on Jet Air­ways (In­dia) by 21% to ₹ 300 af­ter the low-cost car­rier’s poor per­for­mance in De­cem­ber quar­ter, cit­ing weaker rev­enue growth out­look and cost dis­ad­van­tage over peers. Jet shares fell 1.2% to close at ₹ 380.85 on Fri­day be­fore third quar­ter re­sults an­nounce­ment.

Af­ter mar­ket hours on Fri­day, Jet Air­ways, which is the sec­ond big­gest a i rl i ne by mar­ket share in In­dia, posted a 69% fall in stand­alone net profit from a year ago to ₹ 142.4 crore. Rev­enue fell 7.3% to ₹ 3,344.6 crore in the quar­ter. The earn­ings fell short of es­ti­mates due to weak yields and ris­ing fuel costs.

Main­tain­ing a ‘sell’ rat­ing on Jet Air­ways, CLSA said it does not have strong rev­enue ad­van­tage for of­fer­ing a full-ser­vice prod­uct. As Jet Air­ways has sub­stan­tial debt in US dol­lar terms, a ris­ing in­ter­est rate en­vi­ron­ment there is an added neg­a­tive, said CLSA.

The bro­ker­age has cut es­ti­mates for FY17 (2016-17, April-March) to FY19 (2018-19) by 23-36% to fac­tor in the weaker rev­enue per­for­mance. The stock has un­der­per­formed peers — In­terGlobe Avi­a­tion and SpiceJet — in the last three months and one year. In the last three months, Jet Air­ways has de­clined 16.5%, while In­terGlobe Avi­a­tion and SpiceJet have fallen 7% and 8%, re­spec­tively.

CLSA has cut es­ti­mates for FY17 to FY19 by 23-36% to fac­tor in the weaker rev­enue per­for­mance

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