Indigo shares to be in focus as Q4 profits more than doubles YoY; stock gains over 93% in 1 year

Shares of Interglobe Aviation, the parent company of Indigo, in Friday’s session (May 24) marked a fresh all-time high for the second straight day after the company reported better-than-estimated results for the March quarter on Thursday post-market hours.

In early trade, shares of the air carrier traded higher by over 1 per cent at Rs 4,453.1, while it scaled a new high of Rs 4520 per share, gaining as much as 2.7 per cent.

The airline company delivered yet another quarter of strong financial performance led by a range of initiatives and supported by a favorable external environment. Net profit at the entity for the reporting quarter more than doubled year-on-year to Rs 1,894.8 crore as against Rs 919.2 crore in the same period last year. Zee Business research analysts pegged profit to be at Rs 1,310 crore for the period under review. Further total income at the company also logged a 26.7 per cent growth on-year to Rs 18,505.1 crore.

EBITDAR or earnings before interest, tax, depreciation, amortisation and rent) for the reporting period also logged a surge on-year and came in at Rs 4,412 crore as against Rs 2,966.5 crore in the corresponding period last year. EBITDAR margin stood at 24.8 per cent in comparison to 20.9 per cent in Q4FY23.

During the period, the company’s passenger base increased to 26.7 million, a 14 per cent growth on-year. While the load factor and yield improved to 86.3 per cent and Rs 5.19.

As of the March ended quarter, the company’s total cash balance reported has been at Rs 34,737 crore that comprises 20823 crore of free cash and the remaining restricted cash. Furthermore, the total debt (including the capitalized operating lease liability) stood at Rs 51,280 crore. 

“The 4th quarter financial results were positive, making it all four quarters in FY24 profitable. The strong execution of our strategy has yielded consistent results for us as we achieved the targets that we had set for ourselves as a team at the beginning of the year,” said the company’s CEO Pieter Elbers.

On the sidelines of the result announcement, the company in an exchange filing said that it plans to launch a tailor-made business product for India’s busiest and business routes. 

Ahead of its results later in the day, the stock after marking a fresh 52-week high ended higher by 1 per cent at Rs 4,400.55 apiece on the BSE.

How brokerages view Indigo's Q4FY24 results

Morgan Stanley maintains an overweight rating on the counter and has raised the target to Rs 5,142 from the earlier Rs 4,615. The new target implies a possible run-up of 17 per cent from the last close. 

InCred Equities on the other hand retained its 'reduce' rating with a target of Rs 2400. The brokerage has increased FY25F/26FEBITDAR by 11% each factoring in a slightly better margin. It values the company's business at 8.5x FY26F EV/EBITDAR, vs. Mar 2016-Mar 2019 median of 8.8x. We believe IndiGo’s incremental groundings in 4QFY24 (5% of industry’s fleet) would not impact industry tarif

Indigo's share price performance

The stock of Indigo over the past year has shown a remarkable performance with gains of more than 93 per cent.