SpiceJet Shares Hit Upper Circuit for Third Straight Session, Ignoring Adverse UK Ruling

Mumbai, April 10: Shares of SpiceJet surged and locked into the upper circuit for the third consecutive session on Friday, despite an adverse UK court ruling earlier this week, as investors brushed aside legal concerns and chased momentum in the beaten-down stock. 

The stock surged 5 per cent to hit its 5 per cent upper circuit at Rs 12.27 around 10 am, recovering from early losses in the session. This marks the third straight day of gains for the airline’s shares, which have seen sharp buying interest after a prolonged decline. 

UK Ruling  

The rally comes even as a UK court recently directed SpiceJet to pay about $8 million (roughly Rs 70 crore) to engine lessor Sunbird France 02 SAS over unpaid lease rentals and maintenance dues. The London Commercial Court granted summary judgment in favour of the lessor, stating that the airline had no realistic prospect of defending the claim.  

However, the negative development appears to have had little immediate impact on market sentiment. Traders pointed to short covering, improved risk appetite, and a broader rally in aviation stocks as key drivers behind the sharp upmove. 

Flying on Fuel 

The aviation pack has been buoyant in recent sessions, aided by easing crude oil prices—an important cost factor for airlines—and improved global sentiment following geopolitical developments. Lower fuel costs typically support profitability for carriers, triggering buying interest in aviation stocks.  

SpiceJet’s stock had been under severe pressure in recent months, hitting a 52-week low and significantly underperforming the broader market amid persistent financial stress, legal disputes, and operational challenges. The recent rally is therefore also being seen as a technical rebound from oversold levels. 

Concerns Remain 

Despite the sharp upmove, underlying concerns remain. The airline continues to grapple with liquidity constraints, mounting liabilities, and ongoing disputes with lessors. Auditors have previously flagged concerns over its ability to continue as a going concern, highlighting a mismatch between its liabilities and assets.  

Market participants remain divided on the sustainability of the rally. While short-term momentum and sectoral tailwinds may support the stock, analysts caution that structural challenges—including weak financials and legal overhangs—could limit upside over the longer term. 

For now, however, the market appears willing to look past near-term setbacks, with momentum traders driving the stock higher even as fundamental risks linger in the background. 

Source: https://www.bseindia.com/stock-share-price/spicejet-ltd/spicejet/500285/