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Business News/ Markets / Stock Markets/  SpiceJet shares retrace from 52-week high. Opportunity to buy?
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SpiceJet shares retrace from 52-week high. Opportunity to buy?

SpiceJet faces cash crisis, layoff move expected to benefit balance sheet, concrete information awaited

SpiceJet today announced to layoff at least 1400 employee in the coming days. (HT_PRINT)Premium
SpiceJet today announced to layoff at least 1400 employee in the coming days. (HT_PRINT)

After hitting a 52-week high on 5th February 2024, SpiceJet shares have remained sideways to negative in the last one week. However, after the aviation company today cleared to lay off its 1,400 employees SpiceJet share price came under the sell-off heat, losing over 5 percent in the intraday trade. SpiceJet declared the layoff move in line with its cost-cutting measures.

SpiceJet share price today opened upside at 68.50 per share level and went on to touch an intraday high of 68.97 per share level. However, after the stock market news about the SpiceJet layoff, profit-booking was triggered and the aviation stock touched an intraday low of 65 per share on NSE, logging around 16 percent retracement from its 52-week high of 77.50 per share.

Also Read: Stock market today:Gensol Engineering shares jump 8% after winning PLI bid

According to stock market experts, SpiceJet is facing a cash crisis, and the layoff move is expected to benefit its balance sheet. However, more concrete information regarding this SpiceJet layoff is awaited. Till then, SpiceJet shareholders should hold the scrip maintaining strict stop loss at 65 apiece level.

Why SpiceJet shares are under selling pressure?

Speaking about the immediate trigger for selling in SpiceJet shares, Avinash Gorakshkar, Head of Research at Profitmart Securities said, "SpiceJet is facing a cash crisis and the announcement to layoff its employees to the tune of 1400 has triggered selling in the stock. However, this is a short-term trigger and it is expected to evaporate in the short term. It would be interesting to see if some more such moves are coming in the future or if this is just a short-term announcement for the time being?"

Also Read: MCX share price plunges 9% on weak Q3 results; here's what the analyst says

SpiceJet share price outlook

On SpiceJet share price outlook, Sumeet Bagadia, Executive Director at Choice Broking said, "SpiceJet share price is trading in 65 to 75 range. Bullish or bearish trends can be assumed on the breakage of either side of the range. SpiceJet shareholders can hold the scrip keeping strict stop loss at 65 whereas fresh investors are advised to wait. On breakage of 65 support, the stock may go down to 50 per share level whereas on breaching 75 resistance, there can fresh uptrend expected in the aviation stock."

Also Read: Indian stock market: These 5 penny stocks turn into multibaggers YTD, give up to 210% returns

SpiceJet layoff news

Crisis-hit SpiceJet declared its plans to hand out pink slips to at least 1,400 employees in the coming days as the airline works to significantly reduce costs and streamline operations of its depleted aircraft fleet, officials of the aviation company said on Monday. Faced with financial woes, legal battles, and other headwinds, the no-frills carrier might ask more staff to leave as there is excess manpower now compared to the number of planes in service. A final decision on the quantum of layoffs is expected this week, one of the officials in the know said.

Disclaimer: The views and recommendations above are those of individual analysts, experts, and broking companies, not of Mint. We advise investors to check with certified experts before making any investment decisions.

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ABOUT THE AUTHOR
Asit Manohar
Chief Content Producer at Live Mint Digital Team
Catch all the Business News, Market News, Breaking News Events and Latest News Updates on Live Mint. Check all the latest action on Budget 2024 here. Download The Mint News App to get Daily Market Updates.
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Published: 12 Feb 2024, 02:55 PM IST
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