Spicejet, which gained close to 100% in share price over the last 12 months, is according to analysts now the world's best-performing airline stock. This is a significant turnaround for the company from December 2014, when the company did not have enough cash in hand to pay its fuel bills.
Since then, thanks to cost-optimizations, capacity building and utilization, the firm has delivered profits, even though its reserves are in negative (a common scenario for airline firms). The share price has gained 800% since end 2014, and as air traffic in India is set to explode, Bloomberg analysts say that the current valuation is not too high - the stock is a long-term hold. Spicejet is also set to benefit in the next few quarters from the strenghtening rupee, as well as lower crude oil prices. The government's schemes to encourage travel, such as UDAN, is expected to boost air travel volumes rapidly in the coming quarters.