JET Airways...
We have seen mind blowing rally from lower levels and now trading around 600 mark. It looks super on technical charts and could test 640 mark. Three consecutive closes + weekly close above 640 will see further upside rally till 760---840+ mark in days to come.
Support and stop loss intact below 530 on closing basis
Why we like this stock?
There is a big turnaround in the stock in terms of financials. EIBTDA margin from about 1% odd what we have seen in the last quarter that the company delivered an EBITDA margin of about 15.8% odd.
On top of it, the passenger traffic growth has been quite good. So, the company witnessed a passenger traffic growth of about 21% odd.
What we are expecting in this quarter for the industry?
The passenger traffic growth has been even better at about 23% odd. The aviation turbine fuel prices have also corrected by 13% quarter on quarter, so the benefit of that is again expected to percolate on the EBITDA margin side.
We are witnessing the industry is still not competing aggressively on the price front and which we would expect margins for this company to expand to about 17% odd in this quarter. Going forward on a stable basis we would expect margins to be in the range of 12% odd. We expect a significant turnaround in the bottom line of about Rs 911 crore this year and about Rs 1,700 crore next year. This stock is trading at 0.6 time EV by sales compared to the market lead at about 2 time EV by sales.
So, from overall perspective we expect that this company will be big beneficiary of the jump in passenger traffic growth along with the lower aviation turbine fuel prices."
More will update soon!!
