What’s Dragging EIH And Spicejet To 52-Week Lows?

Spicejet And EIH, both have been hitting successive 52-week lows. EIH Limited, under the aegis of The Oberoi Group, operates hotels and cruisers in five countries under the luxury 'Oberoi' and five-star 'Trident' brands. The Group is also engaged in flight catering, airport restaurants, travel and tour services, car rentals, project management and corporate air charters.

Both these stocks have been badly hit because of the coronavirus fears. There are worries that the spread of the virus will have a cascading impact on travel and tourism, which has hit both these companies hard.

In fact, Spicejet should have benefited from a sharp fall in aviation turbine fuel, but, that does not seem to happen. There are worries that load factor for the airline will fall sharply. Spicjet had hit a 52-week high of Rs 156 and has now halved from these levels to hit Rs 70.

EIH too runs the very popular Oberoi Hotel chain and has fallen to levels of Rs 125 from high levels of Rs 225 seen in March last year. If the coronavirus continues to spread, this could have a cascading impact impact on the quarterly numbers of the company. However, even though analysts see an impact not lasting more than 2-3 quarters, the fear of the uncertain remains.