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Fly Jet Airways – Will it Zoom ?

October 22, 2007

After the consolidation of Low Cast Carriers in India, the immediate beneficiary is Jet Airways. The domestic passenger and cargo traffic recorded a growth rate of 44.6% and 8.7%, and the international passenger and cargo traffic recorded growth rates of 15.8% and 13.8% respectively during 2006-07. Domestic air travel in India is predicted to grow at 20% over the next five years.

Jet Airways with a fleet size of 80 aircrafts (including JetLite’s 14 aircrafts) is the second largest carrier in India behind the Air India & Indian combined fleet of 132 planes.

Jet Airways posted a net profit of Rs 30.9 crore in the quarter ended June 30, 2007 compared to Rs 45 crore loss in the corresponding period last year. Total income grew 18% to Rs 1983 crore up from Rs 1678.8 crore in Q1Y07. Revenue from domestic operations accounted for 76% of total operating revenue, compared to 87% during the previous corresponding year. Revenue earned was boosted by fast rising international revenues, which increased by 104.5%.

At the current price of Rs 870 it is trading at a market cap to sales ratio of 1.06x its FY07 sales and 0.78x its FY09E sales. ICICI Expcts the stock to hit a price target of Rs 1,044 within the next 3-6 months.

Related Reading:
TravelGuru is offering Cash Back offer on flights of Jet Airways.

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