IndiGo shares dip as Q4 profit misses estimates

Shares of InterGlobe Aviation, the parent company of India's largest private airline IndiGo, dropped in the early trade after the airline company failed to meet analyst estimates as fuel and operational costs remained high. The shares opened a gap down at ₹2,244.65 but have recovered to ₹2,244.65. At the time of filing the report, the IndiGo shares were trading down 0.25% at ₹2,272.15 on the National Stock Exchange (NSE).

The aviation stock has given a positive return of 1.78% in the past five days and a 15.38% return in the past month. In the six-month period, the stock has surged 26.73%, and 11.20% in the year-to-date period. The stock is trading below the 52-week high of ₹2,332.85 touched on May 18, 2023. At the current share price, IndiGo's market cap stands at ₹87,075.81 crore. In contrast, the BSE benchmark Sensex is also in red at 0.16% at 61,307.12, while Nifty is down 0.27% at 18,083.9.

Brokerages see the airline's earnings rising in FY24 and FY25 on increasing yield and the airline's expansion plans. Motilal Oswal has increased its revenue estimate by 12-17% for FY24/FY25 as it sees the ticketing revenue increasing over the next couple of years. It has maintained a 'neutral' rating on the aviation stock.

IndiGo's profit after tax stood at ₹919.2 crore in the January to March period against a loss of ₹1,681.8 crore in the same period last year. Its revenue surged 76.5% year-on-year to ₹14,160.6 crore. The airline’s passenger ticket revenue grew 80.6% YoY to ₹12,434.6 crore, whereas ancillary revenues surged by 36.6% YoY to ₹1,445.9 crore. EBITDA (earnings before income, tax, depreciation and amortisation), during the quarter under review, stood at ₹2,966.5 crore vs ₹171.8 crore in the year-ago period.

For FY23, however, IndiGo's net loss stood at ₹305.8 crore and its revenue stood at ₹54,446.5 crore vs ₹25,930.9 crore in FY22. EBITDA in FY23 stood at ₹7,311.6 crore against ₹1,148 crore in FY22. As of March 31, 2023, IndiGo had a fleet of 304 aircraft, including 21 A320 CEOs, 162 A320 NEOs, 79 A321 NEOs, 39 ATRs, 2 A321 freighters, and 1 B777, a net increase of 2 passenger aircraft during the quarter.

Pieter Elbers, CEO, IndiGo, says this was the second consecutive quarter wherein IndiGo produced strong operational and financial results. "The companywide initiatives undertaken based on the three strategic pillars of reassure, create and develop enabled us to end the year on a strong note with record revenues."

IndiGo operated at a peak of 1,815 daily flights during the quarter including non-scheduled flights, across 78 domestic destinations and 22 international destinations. For the first quarter of FY24, the company says capacity in terms of available seat kilometers is expected to increase by around 5-7% as compared to the fourth quarter of fiscal year 2023.