Shares of SpiceJet Ltd. hit the 5% upper band on the BSE for the third consecutive session during early trade on Friday. The stock traded at Rs 12.27 on the bourse.
A day ago, a UK court ordered SpiceJet to pay nearly $8 million (about Rs 70 crore) to an aircraft engine lessor, dealing another blow to the cash-strapped airline. The ruling relates to unpaid lease rentals and maintenance obligations.
London's Commercial Court passed a summary judgment in favour of Sunbird France 02 SAS, stating that SpiceJet had no realistic prospect of defending the claim. The court also noted that the airline failed to participate in the proceedings despite being given sufficient opportunity to do so.
The dispute stems from unpaid lease rentals dating back to January 2022, along with maintenance accruals going as far back as November 2020. The lessor issued default notices in July 2022 and subsequently repossessed three aircraft engines between late 2022 and mid-2023.
Grappling with a shrinking fleet, mounting dues and prolonged salary delays, the budget airline has begun workforce reductions, with more than 500 employees impacted in the first phase, the Economic Times reported. The move signals a deepening financial strain at the airline, which now operates only 13 of its own aircraft, down sharply from around 50 earlier.
SpiceJet Share Price Movement
The stock is down 72% in the last 12 months and 59% on a year-to-date basis. The total traded volume so far in the day stood at 1.2 times its 30-day average. The relative strength index was at 47.
One out of the four analysts tracking SpiceJet has a 'buy' rating on the stock, two recommend a 'hold' and one suggests a 'sell', according to Bloomberg data. The average of 12-month analyst price targets is Rs 21.77, which implies a potential upside of 77%.
ALSO READ: SpiceJet Starts Job Cuts As Cash Crunch Deepens, Over 500 Staff May Be Affected: Report
Essential Business Intelligence, Continuous LIVE TV, Sharp Market Insights, Practical Personal Finance Advice and Latest Stories — On NDTV Profit.
