InterGlobe Aviation’s share price surged almost 3% in the early trading session on Friday, following the announcement of a more than twofold increase in net profit, reaching Rs 1,895 crore for Q4 year-on-year. The shares rose as much as 2.83%, hitting an intraday high of Rs 4,529 per share on the NSE.
IndiGo, India’s leading airline and a subsidiary of 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 by 26% YoY to Rs 17,825 crore in the reporting quarter. EBITDAR 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, IndiGo’s passenger ticket revenues grew by 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 by 22% YoY to Rs 16,734 crore, with fuel costs rising 6% YoY to Rs 5,979 crore.
According to Jefferies, which maintains a “hold” rating on InterGlobe Aviation (IndiGo), the firm has upgraded its target price to Rs 4,150. Jefferies highlighted that IndiGo’s Q4 results exceeded expectations, with EBITDA growing 45% YoY to Rs 4,000 crore, compared to an estimate of Rs 3,700 crore. This outperformance was driven by a strong 7% YoY increase in yields, offsetting cost pressures.
Additionally, Jefferies noted that the company plans to launch business class services by the end of CY-24. While yields and spreads benefit from a constrained capacity environment, Jefferies believes the positive outlook is already reflected in the current stock price.
Motilal Oswal reiterated its Neutral rating on the stock, maintaining a target price of Rs 4,210, based on 9 times the estimated EV/EBITDAR for FY26. The stock 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, Motilal Oswal revealed that IndiGo is strategically focused on expanding its international presence through partnerships and loyalty programs. In FY24, IndiGo served 106.7 million customers, adding 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 is taking proactive measures to enhance global brand recognition, anticipating significant growth from the international market in the coming years.
Nuvama’s latest report on InterGlobe Aviation (IndiGo) suggests a positive outlook, maintaining a “Buy” rating and increasing the target price to Rs 5,192 from Rs 4,288. The anticipated growth trajectory is attributed to robust capacity expansion, favorable aviation turbine fuel (ATF) costs, and an uptick in yields.
Revenue Passenger Kilometers (RPKM) have shown an upward trend due to sustained demand, particularly witnessing a significant 49% YoY surge in the international segment. The report emphasizes the company’s ongoing cost rationalization efforts, expected to maintain healthy yields year-on-year. Furthermore, Nuvama highlights the advantageous duopolistic structure within the aviation industry, indicating promising prospects for IndiGo.