After cruising higher for 3 months, will SpiceJet, IndiGo stocks hit turbulence now?


The market hopes are pegged on the developments related to mass vaccination and improving passenger traffic in recent months. Some analysts however are not enthused.

Synopsis

“Aviation is capital-intensive. The industry is likely to report net losses of over Rs 21,000 crore for FY21. Also, airlines are not operating at full capacity,” a senior fund manager of a leading fund house said.

ET Intelligence Group: In the past three months, aviation stocks have caught the fancy of investors on hopes that a recovery in economic activities will improve passenger traffic thereby buoying earnings of the sector badly hit by the pandemic. Shares of SpiceJet and InterGlobe Aviation that owns and operates Indigo have gained 32-82% during the period compared with the 24% gain in the benchmark S&P BSE Sensex. Such a rapid improvement in

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