Good Performance Supports Its Flying High On Deal Talks
Shailendra Lotlikar / 04 Feb 2013
The sentiment surrounding the aviation sector has not been great of recent. The financial performance of Jet however comes as a big breather in times when there is nothing good to talk about the sector. The Etihad deal talks have fuelled the stock higher, but the sustainability of its financial performance is what we would like to be sure about before drawing any conclusions
Jet Airways posted good numbers for the recently concluded Q3FY13. On a YoY basis the company posted a growth of 6.6% in its topline which stood at Rs 4251 crore for Q3FY13 as against Rs 3987 crore for Q3FY12. The company has come back to report profits which stood at Rs 85 crore for Q3FY13as against a loss of Rs 101 crore during the corresponding period. The most astounding fact is that the EBITDA margin stood at 18.3% for Q3FY13 as against just around 2.8% during the corresponding quarter.
While this was what happened on the domestic operations front, in its international operations the net revenues stood at Rs 2385 crore for Q3FY13 as against Rs 2195 crore during Q3FY12. It reported a profit of Rs 81 crore in its international operations for Q3FY13 as against a loss of Rs 61 crore during the corresponding quarter last year. The EBITDA margin stood at 22.4%, against 8.1% for Q3FY12.
On the operations side, the number of departures for the quarter fell by 11.7% on a YoY basis to 40676. The passenger load factor as a per cent fell by 170 basis points to 76.1% for Q3FY13 as against 77.8% for the same quarter last year. The average gross revenue per passenger stands at Rs 8762 for Q3FY13 as against Rs 7387 during the same period last year.
Results for airline companies have perennially been good during the December quarter. The other important highlight about Jet Airways’ performance for the December quarter is that it is close to reaching a deal with Abu Dhabi's Etihad Airways. The deal, if it concludes will be the first since India relaxed ownership rules in September last year and allowed foreign carriers to buy up to 49 per cent in domestic carriers that are battling stiff competition and high operating costs.
As far Jet Airways as an investment idea is concerned, we will take a call depending on whether the deal really materializes between the company and Etihad. For now, though financial performance has been good, the sustainability of it is a question mark.
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