Aviation stocks took a beating on Friday after InterGlobe Aviation that operates India’s largest airline — Indigo, witnessed a sharp fall of 19.1 per cent in its share price.
While the shares of InterGlobe Aviation plunged on account of weaker than expected results for the quarter ended December 2015, it even led to the fall in share price of Jet Airways and SpiceJet.
Results of InterGlobe Aviation, that announced its result on Thursday, fell below expectation and the markets expected better performance on account of low crude oil prices. This also forced investors to tone down their expectation from Jet Airways and SpiceJet and hence their share prices fell by up to 15 per cent during the day before recovering to close with falls of 6.3 and 5 per cent respectively. As a result of the fall, the market cap of InterGlobe fell by Rs 8, 255 crore on Friday and the three companies lost an aggregate of Rs 8,952 crore.
“The market was expecting a much better result from InterGlobe on account of low crude oil prices and a lower than expected result disappointed the investors. Other companies in the sector also fell during the day as it is expected that their results too will be not in line with the expectations,” said an analyst with Motilal Oswal Financial Services.
It is important to note that the fall in aviation stocks came on a day when the benchmark Sensex at the Bombay Stock Exchange rose 473 points or 1.98 per cent.