SpiceJet Q2 - Recapitalisation Remains Key; Logistics Platform Has Monetisation Potential: ICICI Securities
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ICICI Securities Report
SpiceJet Ltd. continues to maintain revenue momentum in its cargo business with H1 FY22 net cargo revenues of about Rs 10 billion.
Recapitalisation remains the key trigger for the business. SpiceJet is in the process of hiving off its logistics platform, SpiceXpress to unlock value for SpiceJet.
This will also allow SpiceXpress to raise capital to fuel its rapid growth.
The expected compensation from Boeing continues to be added every quarter at a run-rate of Rs 1.4 billion but, with more delay, realisation of the cumulative amount (~ Rs 15 billion till date) becomes doubtful in our view.
Expectation of a new airline coming up in India, continued impact of Covid-19 in international sectors, and rising fuel prices (average crude prices in Q4 FY21/Q1 FY22/Q2 FY22 were $58.5/69.1/73.2), remain near term overhang.
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