SpiceJet Ltd is Rated Strong Sell

Current Rating and Its Significance

The Strong Sell rating assigned to SpiceJet Ltd indicates a cautious stance for investors, signalling significant risks and challenges facing the company. This rating is derived from a comprehensive evaluation of four key parameters: Quality, Valuation, Financial Trend, and Technicals. Each of these factors contributes to the overall assessment of the stock’s investment potential and risk profile.

Quality Assessment

As of 30 December 2025, SpiceJet’s quality grade remains below average. The company’s long-term fundamental strength is weak, evidenced by a negative book value and declining net sales. Over the past five years, net sales have contracted at an annual rate of -10.67%, while operating profit has stagnated at 0%. This lack of growth and profitability undermines the company’s ability to generate sustainable shareholder value. Additionally, SpiceJet carries a high debt burden, with an average debt-to-equity ratio of 0 times, indicating reliance on debt financing that could strain financial flexibility.

Valuation Considerations

Currently, the stock is considered risky from a valuation perspective. The latest data shows negative EBITDA, which is a critical red flag for investors assessing operational profitability. The stock’s historical valuations suggest it is trading at levels that do not justify the underlying financial performance. Over the past year, SpiceJet’s share price has declined by approximately 47.18%, reflecting market concerns about its earnings prospects and overall financial health.

Financial Trend Analysis

The financial trend for SpiceJet Ltd is very negative as of 30 December 2025. The company has reported losses for the last two consecutive quarters, with profit before tax excluding other income (PBT LESS OI) falling sharply by 79.1% compared to the previous four-quarter average, reaching a loss of ₹664.38 crores. Net sales for the latest six months stand at ₹1,912.62 crores, declining by 27.09%, while the net profit after tax (PAT) is negative ₹855.14 crores, also down by 27.09%. These figures highlight deteriorating operational performance and shrinking revenue streams, which weigh heavily on investor confidence.

Technical Outlook

From a technical perspective, SpiceJet’s stock is bearish. The Mojo Score has plummeted from 39 to 1, reflecting a sharp deterioration in market sentiment. The stock’s price performance corroborates this view, with a one-day decline of 0.77%, a one-week drop of 4.61%, and a one-month fall of 11.06%. Although there was a modest 1.61% gain over three months, the six-month and year-to-date returns are deeply negative at -25.37% and -46.59%, respectively. Over the past year, the stock has underperformed the BSE500 index across multiple time frames, signalling weak momentum and limited buying interest.

Implications for Investors

For investors, the Strong Sell rating on SpiceJet Ltd suggests caution and a need for thorough due diligence before considering exposure to this stock. The combination of weak quality metrics, risky valuation, deteriorating financial trends, and bearish technical signals points to significant downside risks. Investors should be aware that the company’s current fundamentals do not support a positive outlook, and the stock may continue to face pressure unless there is a meaningful turnaround in operational performance and financial health.

Summary of Key Metrics as of 30 December 2025

• Mojo Score: 1.0 (Strong Sell)


• Market Capitalisation: Smallcap


• Net Sales Growth (5 years): -10.67% CAGR


• Operating Profit Growth (5 years): 0%


• Debt to Equity Ratio (Average): 0 times


• PBT LESS OI (Latest Quarter): -₹664.38 crores (-79.1%)


• Net Sales (Latest 6 months): ₹1,912.62 crores (-27.09%)


• PAT (Latest 6 months): -₹855.14 crores (-27.09%)


• Stock Returns: 1Y -46.44%, YTD -46.59%, 6M -25.37%

Conclusion

SpiceJet Ltd’s current Strong Sell rating reflects a challenging operating environment and financial distress. Despite the rating being assigned on 23 December 2024, the latest data as of 30 December 2025 confirms that the company continues to face significant headwinds. Investors should carefully consider the risks highlighted by the company’s weak quality, risky valuation, negative financial trends, and bearish technical indicators before making investment decisions. Monitoring future quarterly results and any strategic initiatives by management will be crucial to reassessing the stock’s outlook.

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