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IndiGo’s Third Quarter Earnings Beat Estimates

InterGlobe Aviation’s profit rose more than 50 percent to Rs 762 crore in the third quarter.



A protective cover sits on a wing engine fitting of an undelivered Airbus Group SE A320neo passenger jet, operated by IndiGo (Photographer: Balint Porneczi/Bloomberg)
A protective cover sits on a wing engine fitting of an undelivered Airbus Group SE A320neo passenger jet, operated by IndiGo (Photographer: Balint Porneczi/Bloomberg)

InterGlobe Aviation Ltd.'s profit exceeded estimates despite a rise in fuel cost over the December ended quarter.

Profit of the company’s budget airline IndiGo rose 56.4 percent to Rs 762 crore compared to that in the previous quarter, it said in a stock exchange filing. Analysts tracked by Bloomberg had pegged the bottom line at Rs 651 crore. Profit was aided by higher fares, passenger growth and a stronger rupee.

Passenger growth has risen 14 percent while the rupee has appreciated 4 percent year-on-year against the dollar. IndiGo’s average fare has risen 10 percent over the year, according to estimates from more than one brokerage. These tailwinds offset a 12.6 percent rise in jet fuel prices compared to a year ago.

Profitability was also favourably impacted by better revenue management as well as credits received from manufacturers, the company said in a press release accompanying the financial statement. IndiGo’s revenue rose 23.9 percent to Rs 6,178 crore on an yearly basis, also better than estimates.

The low-cost air carrier’s cost per available seat kilometre (CASK) excluding fuel was Rs. 1.94, an increase of 2.2 percent over the same quarter last year. This is below its peers for at least 10 quarters now.

India’s largest airline by market share added 12 aircrafts to its fleet during the quarter, making it 153 aircrafts. This includes 32 A320neos, and 3 ATRs.

We delivered on our promise of starting our regional operations with our ATR aircraft which will enable us to provide connectivity to many more cities in India.
Aditya Ghosh, President, IndiGo

Shares of InterGlobe Aviation rose 5.5 percent to Rs 1,259.95 apiece after the earnings announcement. The stock has climbed over 31 percent in the last 12 months. However, this was muted compared to its peers such as Jet Airways (India) Ltd. and Spicejet Ltd. which rose over 90 percent in the same period.

Other Highlights:

  • Earnings before interest, tax, depreciation and amortisation, and rent costs rose 34 percent to Rs 1,936 crore.
  • Ebitar margin expanded to 31.33 percent from 28.89 percent year-on-year.
  • Seat load factor expanded 120 basis points to 88.5 percent year-on-year.
  • Fuel cost increased 21 percent at Rs 2,016 year-on-year.
  • Fourth quarter available seat kilometer is expected to increase 24 percent.