Best Aviation Stocks in India

Aviation stocks are shares in companies that operate within the aviation sector. Airline businesses, aircraft manufacturers and associated service providers are part of this field. Over the last couple of years, India’s aviation industry has enjoyed remarkable growth, becoming one of the largest and quickest-growing industries on a global scale.

With the economy taking off and incomes rising, there has been an unprecedented demand for flights within the country. This kind of development sets a good stage for investing in aviation stocks since they are bound to perform well due to the increased number of travellers. Indian aviation is the largest in South Asia, with a 69% share of regional air traffic volume.

According to a report by Research and Markets, India’s aviation market size will grow from USD 13.89 billion in 2024 to 26.08 billion by 2030 at a CAGR of 11.08% during 2024-2030.

Many reasons, such as increasing household incomes, the appearance of low-cost airlines, more foreign investments and a growing GDP, are driving the growth of the aviation industry. Both government and private sectors are putting large amounts of money into infrastructure to cater for this development. Additionally, this sector has created many employment opportunities while contributing greatly to the economic expansion of India.
 

Best Aviation Stocks in India

The following is the breakdown of some of the best aviation stocks in India:

Company Name

Sector Type

CMP

Market Cap (Crore INR)

P/E

52 Week High

52 Week Low

SpiceJet Ltd

Airline

₹ 54.9

₹ 4,353 Cr

-

₹ 77.5

₹ 26.5

Interglobe Aviation Ltd

Airline

₹ 4,229

₹ 1,63,227 Cr

20.0

₹ 4,610

₹ 2,333

GVK Power & Infrastructure Ltd

Airport

₹10.90

₹ 1,721 Cr

20.17

₹17

₹ 2.20

Jet Airways (India) Ltd

Airline

₹ 43.6

₹ 495 Cr

-

₹ 75.3

₹ 35.6

Global Vectra Helicorp Ltd

Airline

₹183.70

₹ 257.25 Cr

50.2

₹ 234.25

₹ 58.05

Disclaimer— All the information mentioned above is accurate as of 20th June 2024. However, it is important to conduct research before making any investment decisions in these stocks.
 

 

Overview of Best Aviation Stocks in India

Let’s now understand in detail the companies that are listed above by understanding their working pattern, achievements, and management that makes them worth considering while investing in the aviation industry.

SpiceJet Ltd

Formed in 1984, SpiceJet Limited is a low-cost airline in India that connects many remote parts of the country. It operates the highest number of UDAN flights in India, endeavouring to make air travel affordable for all citizens. Throughout the years, SpiceJet has changed India’s aviation industry and kept on growing with a substantial commitment towards innovation. The company operates around 250 daily flights covering 48 destinations within the nation as well as internationally. In addition, they have subsidiaries like SpiceJet Merchandise Private Limited and Canvin Real Estate Private Limited.

  • The company has delivered a compounded sales growth of 3% over the last 5 years.
  • The company has received a “Best Cargo Carrier” award at the ASSOCHAM 14th International Civil Aviation Conference & Awards in the year 2023
  • Additionally, they also received the Bronze Stevie award for Customer Service Department of the Year 2023 
  • The company has delivered a stock price CAGR of 87% over the last 1 year. 

Interglobe Aviation Ltd

Established in 2004, InterGlobe Aviation Limited is considered among the largest passenger airlines globally, originating from India. The company has been offering tickets priced for every pocket since its inception. Furthermore, they ensure punctuality on all flights and strive to provide a hassle-free travel experience through an extensive network. Therefore, linking travellers from different parts of the globe together, coupled with their market share surpassing 62%, makes them fly 86 destinations domestically and 32 internationally. 

  • The company has delivered a good profit growth of 107% CAGR over the last 5 years.
  • This airline, with a fleet comprising more than 358 aircraft, serves over 118 destinations worldwide. 
  • The company has delivered a stock price CAGR of 35% over the last 3 years.
  • The company has a sales growth of 20% CAGR over the last 10 years. 

GVK Power & Infrastructure Ltd

The main aim of GVK Power & Infrastructure Ltd is to provide operations and maintenance services, personnel, consultancy services, and other incidental service. With a profitability score of 8.2, the company has shown good levels of profit and efficiency. 

  • The company has delivered a compounded profit growth of 27% over the last 3 years.
  • The stock price CAGR of the company is around 74% over the last 3 years.
  • The company has delivered a compounded sales growth of 52% over the last 3 years.
  • The company has also reduced its debt. 

Jet Airways (India) Ltd

Jet Airways (India) Limited is a public limited company incorporated in India, and it began operating on 5th May 1993 mainly for passenger and cargo transportation including related services which are provided under scheduled air travel services. The airlines rank third in terms of market share within domestic routes, excluding low-cost carriers(LCCs).

  • The company has a compounded profit growth of 15% over the last 3 years.
  • The company‘s debtors days have been improved from 97.3 to 38.8 days.
  • The company is expected to give good quarters in the coming years. 
  • The company is one of the youngest fleets, with an average age of 7.33 years. 

Global Vectra Helicorp Ltd

Global Vectra Helicorp Ltd (GVHL) started its journey in 2005. It is one of the largest private helicopter companies in India with over 24 years of experience ensuring safe and reliable services throughout all these years. The company’s helicopter services specifically target offshore oil & gas support operations. They also engage in onshore flights for state governments' electioneering campaigns (it offers charter flights on request). 

  • The company has delivered a stock price CAGR of 63% over the last 3 years.
  • The compounded profit growth of the company for the last three years stands at 27%. 
  • The company has flown over 4.6 Million passengers.
  • The company has maintained a record of safety with over 260,000 hours of accident-free flying.

 

Key Factors to Evaluate Before Investing in India's Aviation Sector Stocks

The Indian government’s support for the sector, combined with increasing demand for air travel, has led to popularity growth in aviation stocks among investors domestically. This has consequently seen various airline companies operating within India’s borders experience sharp increases over time when it comes to their stock prices. Let’s understand the factors that one needs to consider while investing in the best aviation stocks in India.

Competitive Market

Airline company performance and its market share are important measures of competitiveness for aviation companies. Therefore, understanding where a company stands about others requires knowing its market share very well so that you can determine how strong or weak they are within the industry.

Financial Health Analysis

Before any investment decision is made, it is important to conduct a thorough examination of the financial status of an aviation company. This will involve looking at various indicators such as rising revenues over time, profit margins achieved, debt levels in comparison with equity and cash flow flexibility, etc. Additionally, past performances should also not be forgotten when investing in India’s aviation stocks.

Macroeconomic Factors

The overall status of the country’s economy plays a significant role in influencing how well airlines perform. Therefore, investors should take into account India’s current economic situation by considering factors like changes observed ( if any ) in Gross Domestic Product ( GDP ) levels, inflation trends, as well as prevailing interest rates, which could significantly affect this sector.

Understanding Regulatory Landscape

The laws controlling the activities of aviation industries are strict. Any changes made to these rules can be very powerful to such an extent that a larger section, as well as a single enterprise, might affect the overall performance of this sector greatly. So, anybody investing should always be careful with the laws on the horizon and the potential impact of the industry.

Evaluating Industry Dynamics

For one to make wise decisions of investment in this field, one should have a good understanding of what is happening currently in the industry. This means that they should know all recent technological advancements, changes in consumer needs and even competition levels, among others. These will help them come up with better ways through which they can invest and thus increase their chances of gaining profit from it.
 

Ratios Need to Consider While Investing in Aviation Stocks

While investing in stocks, different ratios need to be considered to determine various aspects of a company’s operations, profitability, efficiency and leverage as well. Some of the most important financial ratios include:

Profitability Ratios

The various profitability ratios that an investor should consider while investing in aviation stocks include:

  • Gross profit margin: It shows what percentage of sales revenue is left after deducting the cost of goods sold, thus indicating how well production costs have been managed by the firm 
  • Profit margin: This measures the percentage of each rupee of revenue translated to net income. This gives a general view of profits realised by the company.
  • Return on Equity (ROE): The ROE measures the company’s ability to make profits from its own money and gives an idea of how well management uses shareholders’ investments.

Liquidity Ratios

The ratio that evaluates the liquidity includes:

  • Current Ratio: It compares current assets with current liabilities, showing if a firm can pay off all obligations in the short term.
  • Quick Ratio (Acid-Test Ratio): This ratio considers only the most liquid assets (cash/marketable securities/accounts receivable) against liabilities at hand, providing stricter measures for short-run liquidity.

Debt and Leverage Ratios

The debt and leverage ratio consists of:

  • Debt-to-Equity Ratio: It reveals what portion of company funds comes from lenders as opposed to owners, indicating financial leveraging and risk.
  • Interest Coverage Ratio: This is the indication of whether or not enough money is being earned before taxes have been taken out so that interest can be paid on loans made by banks, etc.

Efficiency Ratios

To determine the efficiency, one should consider ratios like:

  • Asset Turnover Ratio: This tells us how many rupees worth of sales are generated by each rupee’s worth of total assets employed, indicating operational effectiveness
  • Inventory Turnover Ratio: A measure showing the number of times over which stock used up during a given period, usually one year would last if no more acquired replaced sold. It means what management should aim at.
     

Earnings Per Share (EPS) and Price-to-Earnings (P/E) Ratio

The earnings allocated to each outstanding share of common stock are represented by EPS (Earnings Per Share). In comparison, the price-to-earnings ratio is used for comparing the market price of a company’s stock with its per-share earnings and signifies what value investors place on each rupee of profits.

Cash Flow Ratios 

Operating Cash Flow Ratio is used for assessing a company’s ability to generate money from its primary operations, which are important for its continuance. There is also free cash flow depicting the amount of cash left after deducting capital expenditure from the total generated.

Return on Assets (ROA)

ROA measures a firm’s capacity to make a profit from all its assets, thereby showing how well the asset utilisation is done.
 

Potential Risks Associated with Indian Airline Companies

Before you invest in aviation stocks, it’s important to know what risks are involved with the industry. Here are some common risks associated with Indian airline companies: 

  • Regulatory Dependence and Unforeseen Events: The one who is active in the aviation sector needs to understand that their industry is closely monitored by government bodies. If the regulations change due to unplanned incidents, it will have significant effects on both operational and financial aspects.
  • Geopolitical Factors and Supply Chain: Companies that operate within aviation are also influenced by politics across the globe, which can lead to wars among nations or trade disagreements between them. Hence, it also has the potential to affect supply chains while at the same time changing demand levels for flights ultimately having an impact on share prices, too.
  • Fuel Price Fluctuations: Another thing to note is that airline stocks tend to be volatile due to fluctuating fuel prices since high costs may discourage people from travelling by air, thereby reducing airlines’ profits.
  • Shift in Business Travel: It should be noted that there might also arise changes in the number of people travelling for work purposes. This is because many have embraced online meetings as well as remote working, which means fewer physical meetings need to be held, therefore reducing the need for business trips. 
     

Conclusion
Today, India is the third biggest domestic aviation market in the world after the US and China, which has been achieved by the centre providing a conducive environment for the same. Stocks from airlines based in India may be good for people who are considering investing money in them. To invest in the best aviation stocks in India, one is suggested to use a reliable stock market app. Those who decide to do so should ensure that they take every precaution possible since these kinds of shares have some particular risks attached. Furthermore, if investors want their investments in the best Indian aviation equities to pay dividends, investors must be prepared to carry out comprehensive research. 

FAQs on Aviation Stocks

Before investing in aviation stocks, you should consider their financial performance, market share growth prospects, debt level management quality, etc.

With rising incomes and air travel demand in India, aviation stocks can be a good long-term investment if chosen wisely and after thorough research.

Potential risks associated with investing in Indian aviation stocks include regulatory changes, geopolitical tensions, fuel price volatility, and shifts in business travel patterns.

Profitability ratios (profit margin, ROE), liquidity ratios (current ratio, quick ratio), and debt and leverage ratios are some of the important ratios to consider for aviation stock market analyses.

The growth of the Indian aviation sector has been greatly influenced by foreign investments, and businesses that partner with outside nations could offer good opportunities for investors.