IndiGo parent InterGlobe Aviation posts Q2 loss amid fuel costs and aircraft grounding challenges

Shares of IndiGo’s genitor company, InterGlobe Aviation, plunged implicit 12 per cent connected October 28 aft the hose reported a nett nonaccomplishment of Rs 987 crore for the 4th ended September 30, 2024, compared to a nett net of Rs 189 crore successful the aforesaid play past year.

Despite gross rising by 14.6 per cent year-on-year to Rs 17,759 crore, profitability took a deed owed to substance ostentation and craft grounding costs. Shares traded astatine Rs 3,811.35 connected the NSE pursuing the results—marking IndiGo’s steepest single-day driblet since February 2022.

Excluding overseas income, IndiGo’s nett nonaccomplishment stood astatine Rs 746.1 crore, a sizeable downturn from the Rs 806 crore nett posted successful the anterior year’s quarter. EBITDAR besides saw a flimsy diminution of 0.5 per cent to Rs 2,434 crore. Operating costs surged 21.9 per cent year-on-year to Rs 18,666.1 crore, driven by an 11.8 per cent summation successful outgo per disposable spot kilometre (CASK).

Operational Performance
Despite challenges, IndiGo recorded maturation successful disposable spot kilometres (ASK) and gross rider kilometres (RPK), up by 8.2 per cent and 7.4 per cent, respectively. However, the airline’s load origin slipped 0.6 ground points to 92.6 per cent, and gross per disposable spot kilometre (RASK) saw a humble summation of 4.8 per cent, portion output roseate 2.3 per cent to Rs 4.55 per kilometre.

Brokerages Respond: Optimism Remains
Kotak Institutional Equities maintained a affirmative stance, mounting a people terms of Rs 5,200, acknowledging the adverse impacts of groundings and substance costs but highlighting a beardown request outlook. Similarly, Goldman Sachs recommended a ‘buy’ with a people terms of Rs 4,800, noting that IndiGo’s wide yields and rider metrics were favourable, though higher CASK impacted the quarter’s results. Conversely, Nuvama downgraded IndiGo to ‘hold,’ citing competitory overcapacity concerns and shifting valuation dynamics.

Pieter Elbers, CEO of InterGlobe, expressed assurance successful IndiGo’s maturation trajectory. “Despite headwinds, we are reducing costs associated with grounded craft and stay focused connected planetary expansion,” Elbers stated.

As IndiGo navigates a challenging situation with accrued costs and competitory pressures, its committedness to expansion, peculiarly successful planetary markets, whitethorn supply maturation stableness going forward.