Stock watch: Spicejet

With a boom in the Indian aviation sector, the stock of private airline company SpiceJet is a good stock to add to the portfolio. SpiceJet ( formerly known as Royal Airways) has been on a roll in the past few months.

According to market sources, the stock has witnessed a sharp rally on back of strong institutional buying with large funds adding the stock into their portfolio.

"While the fundamentals may not justify the sharp rally in the counter, the market is betting on the boom in the aviation sector. Even from current levels, the stock is expected to appreciate by at least 50 per cent in the short to medium term," said a head of research with a domestic broking firm.

The stock in Thursday's weak trading ended higher at Rs 86.85 against yesterday's close of Rs 85.30. The counter witnessed impressive volumes of over 22 lakh shares on BSE on Thursday.

A sector analyst with a domestic broking firm said, "Indian aviation sector is at a booming stage and SpiceJet is among the listed aviation stocks which are likely to benefit immensely in the medium to long term."

The stock is in the limelight of late on back of reports that the Hindujas are close to buy out the NRI promoters in SpiceJet. A dealer with a domestic broking firm said, "The counter has been witnessing momentum buying in the past few trading sessions on back of rumors of a stake sale."

As of June 30, the foreign institutional investors hold 20.6 per cent stake in the company.