On account of accelerating unlock activities, speculations about Indian tourism industry,Govt. of India (GoI) mulling to remove price cap on flight tickets and increase flight capacity to the tune of 85 per cent, stock market experts have given ‘buy’ tag to aviation stocks — IndiGo and SpiceJet.
They said that unlock activities are aiding rebound in Indian tourism industry, which is reflective in the jet fuel price rise.
Experts went on to add that now GoI may remove cap on flight price and increase flight capacity up to 85 per cent any time. So, it’s time to buy aviation stocks for short-term gains.
Speaking on the reasons that may fuel aviation stocks in immediate short-term; Avinash Gorakshkar, Head of Research at Profitmart Securities said, “Due to acceleration in unlock activities, Indian tourism sector is witnessing rebound. And most of the passengers are preferring to aviation route that is getting reflected in the rising moolah of the aviation companies. Now, all eyes are now set on the central government as they are mulling to remove the price cap on flights and raise the flight capacity up to 85 per cent. This announcement can come any time and once it is announced, there will be sharp rise in aviation stocks. IndiGo So, it’s better to buy and hold aviation stocks and get maximum return once the announcement comes.”
On aviation stocks that one can buy; Avinash Gorakshkar of Profitmart Securities said, “SpiceJet and IndiGo stocks are looking better placed and one should think of buying these aviation stocks today.”
However, he said that the stocks should be bought for the short-term and one should book profit after the rise in avation stocks post indigo and SpiceJet – GOI announcements mentioned above.
Information Credits to livemint and money control.
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