Shares of Interglobe Aviation which runs the IndiGo airline surged on Thursday morning, after global firm Morgan Stanley raised the target stock price.
Shares of Interglobe Aviation which runs the IndiGo airline surged on Thursday morning, after global firm Morgan Stanley raised the target stock price. Interglobe Aviation share price gained more than 3% to hit the day’s high at Rs 1,858.75 on BSE. Morgan Stanley noted that rising international mix, share of NEOs and healthy fare environment keeps it overwieght. The global firm has left core earnings estimates largely unchanged. The reported EPS is set to go down 16% in FY-18 due to changes in accouting regulations.
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The global firm noted that the reported EPS goes down 16% in FY20 due to IndAS 116. The PL, Balace Sheet now reflect the new accounting standard, noted Morgan Stanley. The firm an overweight rating on Indigo shares with a target price of Rs 2,261. According to a report by SBI Capital IndiGo’s fuel CASK reduced to Rs 1.49 per ASKM, as compared to SpiceJet’s Rs 1.54 per ASKM, in FY19. IndiGo improved on its costs further in the first quarter of 2019, and its fuel CASK was down to Rs 1.36. The research report showed that IndiGo’s fuel CASK reduced to Rs 1.49 per ASKM, as compared to SpiceJet’s Rs 1.54 per ASKM, in FY19.
In the latest quarter, InterGlobe Aviation reported its highest-ever quarterly profit at Rs 1,203 crore in the April-June quarter – a surge of 42 times compared to Q1FY19 . The firm’s revenue from operations soared 44.6% to Rs 9,420 crore, operating margins (earnings before interest, tax, depreciation, amortisation and rentals) was up 12.1 bps on-year to 29.5%. Indigo’s rise in profits came even as full-service carrier Jet terminated all operations on April 17 due to financial crisis, leading to 15% y-o-y fall in overall domestic capacities.