Turnaround Stocks 2025: SpiceJet Posts First Profit in 7 Years. Blue Skies Ahead?

Over the weekend, budget carrier SpiceJet posted its Q4 earnings. The company reported its highest ever quarterly profit and also staged a turnaround for the full year FY25.

The stock price gained 5% in intraday trade today reacting to the same.

Note that this development comes at a time when SpiceJet is reacting to a triple threat – oil price surge, the Air-India crash, and rising geopolitical tensions – all of which are adding pressure on aviation stocks.

Let’s look at the detailed numbers of SpiceJet and understand how the company got here.

SpiceJet Q4 Results

In Q4, SpiceJet’s revenue declined by 17% YoY, owing to lesser operational fleets during the quarter. 

The company operated 25 aircrafts in Q4FY25, lower than 28 in the previous quarter. Due to this, its available seat kilometers (ASKM) fell 29%. 

Despite this decline in revenue, SpiceJet’s EBITDA rebounded sharply owing to better yields and a better route mix. During the quarter, its yields rose by 28%.

SpiceJet’s fare yields were better due to the religious travel boom including Mahakumbh. If you remember, airfares had surged almost 5x-10x or even more during this period.

Subsequently, its net profit surged more than two-fold or 167% during the quarter. 

SpiceJet Q4FY25 Performance

Source: Investor Presentation

Source: Investor Presentation

SpiceJet Full Year Results

SpiceJet’s share price and its financial performance – both have remained rangebound over the past few years.

Although the airline sector has grown, SpiceJet has been unable to grow its profits due to constant pressure on its profitability from fuel costs as well as interest and depreciation.

Even though its topline has grown, it has continued to incur losses. A classic case of growth having a negative impact on value.

But the story seems to be changing now…

For the full year FY25, SpiceJet posted a profit of Rs 48 crore, the first profit in seven years.

This was on the back of better yields, cost optimisation measures, and capital infusion.

SpiceJet FY25 Performance

Source: Investor Presentation

Capital Infusion

SpiceJet improved its net worth during Q4, following a promoter equity infusion of Rs 500 crore.

SpiceJet Capital Infusion Update

Source: Investor Presentation

Restructuring Update

Apart from upbeat earnings, SpiceJet also announced a restructuring update – the company plans to restructure its $121.18 million in lease arrears owed to lessors managed by Carlyle Aviation Management, through a securities issuance.

According to Spicejet’s filing –

• – Carlyle may subscribe to equity shares worth up to $50 million at Rs 65 per share.
• – The subscription will be structured to ensure Carlyle’s stake remains below 10%.
• – The transaction will completely restructure the outstanding arrears due to the lessors.

Outlook

In a decade, India’s aviation industry has experienced significant growth. The country’s total operational airports have more than doubled from 74 in 2014 to over 160 at present, with expansion aimed at taking it to 350-400 by 2047.

Source: IBEF

India is poised to become the world’s third-largest aviation market by 2026, with a projected 1.3 billion passenger trips by 2040, according to Airports Council International (ACI). 

SpiceJet’s management has outlined a massive expansion plan, from 25 to 52 planes by 2025.

Source: Investor Presentation

While Spicejet may have benefited in some way this year owing to the Mahakumbh event, investors should note that the event does not happen every year. So ultimately, it will all depend on SpiceJet’s operational ability.

The management is confident of growth, on the back of its operational fleet doubling in the next six months.

However, in the wake of rising geopolitical tensions, airlines could face a materially adverse impact on cancellation rates and booking trends — a development that doesn’t bode well for the industry as a whole. Investors should therefore remain cautious.

For more details, check out SpiceJet’s financials on our website.

Happy Investing.

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