SpiceJet rallies 50% in April 2026 on VAT cut hopes

SpiceJet locks 5% upper circuit for second session

SpiceJet shares hit the 5% upper circuit for the second straight session on Wednesday, extending a sharp rally in the stock. In afternoon trade, SpiceJet Ltd was locked at ₹14.62. The move came as sentiment in airline counters improved on reports of possible government relief linked to fuel taxation. The stock’s rise also stood out because it followed a long period of weak performance.

April surge versus a weak one-year picture

With the latest move, SpiceJet was up about 50.1% in April. Despite that bounce, the stock remained down about 70.6% over the past one year, underlining how much value had been lost before the recent rally. Separately, available market data showed SpiceJet at ₹14.50, down ₹0.23 (1.56%) as on 28 April 2026 at 09:42, with a “Score” of 24/100 on the cited platform. Taken together, the figures show a stock swinging sharply even within short time windows.

IndiGo trades lower but recovers from intraday lows

InterGlobe Aviation Ltd, the operator of IndiGo, was marginally lower in the same session, trading at ₹4,675.8, down 0.37%. However, it recovered from the day’s lows and was up about 1.1% from the intraday bottom, indicating buying support at lower levels. The difference in the day’s price action between SpiceJet and IndiGo reflected how investors were positioning around fuel-cost risks and potential policy relief.

What triggered the optimism: VAT relief chatter

The sector move came amid reports that the government was considering additional measures to cushion airlines from the impact of the West Asia crisis, particularly on fuel costs. CNBC Awaaz reported, citing unidentified sources, that the Civil Aviation Ministry was in discussions with state governments to reduce value-added tax (VAT) on aviation turbine fuel (ATF). ATF is a key cost component for airlines, and any reduction in ATF taxes could materially ease cost pressures, especially for financially stressed carriers such as SpiceJet.

Why ATF matters: crude shock and cost structure

Multiple reports in March highlighted how quickly fuel costs can reshape investor expectations for airlines. ATF costs are widely tracked because they account for about 30% to 40% of airlines’ total operating expenses in India, as cited in the provided market coverage. When global crude rises, ATF typically follows, and airline margins come under pressure unless fares or surcharges increase.

A contrasting session: aviation stocks sold off with the market

On another trading day, aviation stocks were under selling pressure with broader indices. Reports said the Sensex and Nifty 50 tumbled over 2% each amid weak global cues linked to remarks attributed to Donald Trump about continued aggressive military action and warnings that U.S. strikes on Iran would persist for the next few weeks. In that session, InterGlobe Aviation dropped as much as 5% to ₹3,970.05 on the BSE, with market capitalisation slipping to ₹1.55 lakh crore. SpiceJet fell 4% to ₹9.53, taking market capitalisation down to ₹1,477 crore, after a 1.95% rise in the previous session.

Brent above $107 and the pressure on airline profitability

In the same market narrative, Brent crude climbed above $107 per barrel, adding to concerns about near-term profitability for airlines. The coverage linked the stock weakness to fears of higher ATF costs and the limited ability to immediately pass through increases. This is why policy steps like a VAT reduction on ATF, if pursued, can quickly shift sentiment, even before any formal decision is announced.

IndiGo’s fuel surcharges and pass-through limits

Effective April 2, IndiGo raised fuel charges across domestic and international routes amid a sharp spike in ATF prices, which the report said surged over 130% month-on-month. For domestic operations, the government allowed only a 25% staggered pass-through of the increase, limiting immediate fare impact. Revised domestic fuel charges ranged from ₹275 for routes up to 500 km to ₹950 for routes above 2,000 km. Emkay Global Financial Services was cited as noting that IndiGo’s domestic charges were broadly in line with the March 14 revision, while international fuel surcharges were increased significantly, including on long-haul routes such as South Asia to Europe where charges ranged between ₹900 and ₹10,000.

March timeline: fare caps removed, but fuel worries stayed

On March 23, 2026, SpiceJet and IndiGo traded with notable losses in morning trade, with SpiceJet slipping as much as 9.95% to ₹10.85 on the BSE and IndiGo declining 4.59% to ₹3,958.50 on the NSE. The same day, the government announced removal of temporary caps on domestic airfares, effective March 23, according to an order issued by the civil aviation ministry. The temporary caps had been imposed on December 6 to contain an abnormal surge in ticket prices arising out of large-scale flight disruptions of IndiGo, and the order stated the situation had stabilised with restoration of capacity and normalisation of operations.

Crude spike day: oil up over 26% and aviation stocks slide

On March 9, 2026, reports said oil prices jumped more than 26% as the conflict in West Asia continued to disrupt supplies. In early trade, IndiGo was quoted down 7.57% at ₹4,071.35 and SpiceJet down 5.29% to ₹13.26. The session summary also reported that IndiGo closed down 3.47% at ₹4,251.20, with a day high of ₹4,255 and low of ₹4,035, while SpiceJet closed down 6.64% at ₹13.07, moving between ₹13.40 and ₹12.85.

Key data points at a glance

What investors are tracking next

The core variable in these moves is fuel: Brent crossing $107 per barrel in one report, crude approaching $120 per barrel in another, and repeated references to ATF as the largest operating cost line item. Against that backdrop, the reported Civil Aviation Ministry discussions with state governments on a VAT reduction for ATF became a clear catalyst for sentiment, particularly in a financially stressed airline stock. Separately, fare-rule changes such as the withdrawal of temporary airfare caps can influence pricing power, but the short-term market focus has stayed on fuel shocks and policy responses tied to ATF.

Conclusion

SpiceJet’s back-to-back upper circuits and April rally came alongside sector headlines on potential ATF VAT relief, while IndiGo’s moves reflected the push and pull between crude-driven cost risks and tactical buying on declines. The next triggers will be any formal communication on ATF VAT discussions and further updates on fuel surcharge actions as airlines respond to volatile energy prices.