Shares of Kingfisher Airlines tanked by as much as 4 per cent in morning trade on the bourses today, but made a smart recovery after the air carrier announced that its net loss more than doubled to Rs. 468.66 crore in the second quarter.
Kingfisher Airlines’ net loss widened to Rs 468.66 crore in the quarter ended September 30, 2011, from Rs. 230.81 crore in the same period last year.
Reacting to the numbers, the stock opened on a sluggish note on the BSE and then dropped by 2.81 per cent to an early low of Rs. 20.75.
Similar movement was witnessed on the National Stock Exchange, where the stock fell by 4.20 per cent to touch an early low of Rs. 20.50 after opening at Rs. 21.10.
However, the stock later made a smart recovery on the BSE, where it was quoted 0.23 per cent higher at Rs. 21.40 at 1040 hours, though it was still down by 0.93 cent at Rs. 21.20 on the NSE at the same time.
Commenting on the share movement, Ashika Stock Brokers Research Head Paras Bothra said, “The results are bad, losses are mounting and the financial position of the company is in the doldrums. The initial jerk in the counter was a reaction to the poor Q2 results.”
“The bad news already factored in the price and the market is now anticipating that some sort of restructuring work will be done and a workable solution will be carried out by the lenders and promoters,” Mr. Bothra added.
Bankers have made it clear that Kingfisher’s promoters will have to infuse Rs. 800 crore worth of fresh equity into the company if they are to consider a second restructuring of existing debt, even as opposition mounted to any bailout of the private carrier.
Bankers have asked the troubled airline to come out with a “credible” plan.
The lenders - a 13-bank consortium led by SBI that is yet to decide on ways to ease the troubled airline’s Rs. 7,057.08 crore-debt burden - are due to meet the Kingfisher management today.