SpiceJet Stock Continues Rally, Hits Upper Circuit for Fourth Straight Session
SpiceJet Shares Extend Rally for Fourth Consecutive Session
SpiceJet shares continued their sharp rally on Monday, hitting the upper circuit for the fourth consecutive session. The stock was locked in the 5 percent upper circuit at Rs 12.88 in afternoon trade, taking its four-day gain to about 21.4 percent. This sustained buying interest has driven consecutive upper circuits, reversing a prolonged period of weakness in the airline's stock.
The rally has been accompanied by strong trading volumes, with the stock's traded volume today nearly equal to its 20-day average of around 21.2 crore shares. This indicates continued high activity and participation in the counter. SpiceJet's market capitalisation stood at around Rs 1,650 crore.
The current upmove follows a volatile start to the previous session, when the stock had initially fallen after news of a UK court ruling directing the airline to pay about $8 million (around Rs 70 crore) to aircraft engine lessor Sunbird France 02 SAS. However, the stock had reversed losses during that session and ended at the upper circuit, and has continued to build on that momentum since.
The UK's Commercial Court had granted summary judgment in favour of the lessor, relating to unpaid lease rentals dating back to January 2022 and maintenance accruals from November 2020. The lessor had issued default notices in July 2022 and repossessed three engines between late 2022 and mid-2023.
| Company | Past One Year Performance |
|---|---|
| SpiceJet | -72.7% |
| Nifty 50 | 2.1% |
The development adds to SpiceJet's broader financial challenges. The airline has been under pressure since the Boeing 737 MAX grounding and the COVID-19 pandemic, which disrupted operations and weakened its balance sheet. The airline has also faced ongoing issues related to lease disputes, fleet constraints, and competitive pressures, including loss of market share to newer players such as Akasa Air.
Despite the recent rally, the longer-term trend remains sharply negative. SpiceJet shares are still down about 72.7 percent over the past one year, even after the latest gains, significantly underperforming the benchmark Nifty 50, which has risen around 2.1 percent during the same period.
Investor Takeaway
Investors should be cautious of the stock's rally despite ongoing financial stress and legal setbacks.
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