IIFL Institutional Equities, a part of the IIFL Group, one of the leading players in the Indian financial services space, recommends “Buy” Jet Airways.
According to IIFL report, despite weakness in volume growth, pricing discipline continues in the domestic industry. The demand-supply equation is likely to remain favourable in FY13.
This, combined with decrease in fuel costs and savings in operating expenses (vendor contracts, pilot salaries) bodes well for margins of Jet Airways (Jet). The company is focussed on becoming leaner and fitter in FY13 by cutting down unprofitable routes, both domestic and international, report stated.
Jet also plans to trim its aircraft count through outright sale and sale-and-lease-back. Management targets cutting down debt by ~Rs40bn by end-FY13. BUY, brokerage added.
The report was published by IIFL’s Institutional Equities Research desk.