Interglobe Aviation’s share price surged almost 3% in the early trading session on Friday, as the company reported more than double the net profit, reaching Rs 1,895 crore in the Q4 results year-on-year. The shares soared as much as 2.83%, reaching an intraday high of Rs 4,529 per share on the NSE.
India’s leading airline IndiGo, parented by InterGlobe Aviation, reported a 106% year-on-year (YoY) growth in its consolidated net profit, reaching Rs 1,895 crore for the fourth quarter, compared to Rs 919 crore in the same quarter last year.
Revenue from operations increased 26% YoY to Rs 17,825 crore in the reporting quarter. EBITDAR for the reporting quarter rose 49% YoY to Rs 4,412 crore, while profit before tax (PBT) surged 92% YoY to Rs 1,771 crore.
For the reporting quarter, the airline’s passenger ticket revenues grew 25% YoY to Rs 15,601 crore, and ancillary revenues jumped 19% YoY to Rs 1,719 crore. Total expenses for the quarter ended March 2024 increased 22% YoY to Rs 16,734 crore, with fuel costs rising 6% YoY to Rs 5,979 crore.
Brokerages on IndiGo
Jefferies on IndiGo
According to a report by Jefferies on InterGlobe Aviation (IndiGo), the firm maintains a “hold” rating but has upgraded its target price to Rs 4,150.
The report highlights that IndiGo’s Q4 results exceeded expectations, with EBITDA growing 45% year-on-year to Rs 4,000 crore, compared to an estimate of Rs 3,700 crore. This outperformance was driven by a strong 7% year-on-year increase in yields, which offset cost pressures.
Additionally, Jefferies noted a surprising development as the company announced plans to launch business class services by the end of CY-24. Yields and spreads continue to benefit from a constrained capacity environment, but Jefferies believes the stellar run in the stock already factors in the positive outlook.
Motilal Oswal on InterGlobe Aviation
Motilal Oswal reiterates its Neutral rating on the stock, maintaining a target price of Rs 4,210, based on 9 times the estimated EV/EBITDAR for FY26.
Analyzing the stock, it is noted that it is currently trading at approximately 24 times the estimated earnings per share (EPS) for FY26, standing at Rs 187, and at 9.7 times the Enterprise Value to Earnings Before Interest, Taxes, Depreciation, Amortization, and Rent (EV/EBITDAR).
In a recent report by Motilal Oswal on InterGlobe Aviation (IndiGo), it was revealed that the company is strategically focused on expanding its international presence through partnerships and loyalty programs.
In the fiscal year 2024, IndiGo served a total of 106.7 million customers, marking a net increase of nine passenger aircraft. With eight strategic partners, the company held a 27% international share in terms of Available Seat Kilometers (ASKs) during FY24.
The management has undertaken proactive measures to enhance global brand recognition, anticipating a larger portion of growth from the international market in the forthcoming years.
Nuvama on InterGlobe Aviation
Nuvama’s latest report on InterGlobe Aviation (IndiGo) suggests a positive outlook, maintaining a “Buy” rating while increasing the target price to Rs 5,192 from Rs 4,288 previously.
The anticipated growth trajectory is attributed to several key factors including robust capacity expansion, favorable aviation turbine fuel (ATF) costs, and an uptick in yields.
Notably, Revenue Passenger Kilometers (RPKM) have seen an upward trend owing to sustained demand, particularly witnessing a significant surge of 49% year-on-year in the international segment.
The report underscores the company’s ongoing efforts towards cost rationalization, which is expected to contribute to maintaining healthy yields year-on-year. Furthermore, Nuvama highlights the advantageous duopolistic structure within the aviation industry, indicating promising prospects for IndiGo.
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