Airlines in sweet spot; expect SpiceJet to see rerating on IndiGo listing: Bandyopadhyay

In a chat with ET Now, market expert Sudip Bandyopadhyay shares his views on aviation stocks.

ET Now: What is your view on aviation for the short term?

Sudip Bandyopadhyay: Aviation sector is in a sweet spot at the moment. Fuel prices have come down significantly over the last one year. The corresponding benefit has not been passed on to consumers. So, there has obviously been a significant benefit for airlines compared to what it was a year back.

Let us take SpiceJet's case. It had been struggling under the old management. Besides, aviation fuel prices were at a very high level. Now, given the lower fuel costs, it is a straight benefit to the bottom line not only for SpiceJet but for all aviation companies.

From a market perspective, the listing of IndiGo will be a landmark event. The valuations which Indigo gets will probably lead to a rerating of SpiceJet.

Undoubtedly, the SpiceJet vis-à-vis IndiGo price expectation is at a significant discount. Given the fact that both are profitable airlines — I understand SpiceJet is running at 92% capacity utilisation — it is definitely going to bode well for them.