Motilal Oswal: IndiGo’s Q1 Provides Ample Clarity On The Path Ahead

BQ Blue’s special research section collates quality and in-depth equity and economy research reports from across India’s top brokerages. These reports offer BloombergQuint’s subscribers an opportunity to expand their understanding of companies, sectors and the economy..Motilal Oswal Report.IndiGo reported higher yield than estimate at Rs 4.53 (up 11.1% YoY) versus our estimate of Rs 3.7.Yield was stronger on the higher base of last year (the quarter of Jet Airways’ demise), aided by fare bands imposed by the Ministry of Civil Aviation. However, the company is of the view that fare caps on domestic travel should be removed as early as possible.IndiGo had cash burn of Rs 400 million amid the crisis, which reduced to Rs 300 million as of June 30, most of the reduction coming out of employee costs. The company has undertaken cost-reduction initiatives for leasing, payroll, and other costs.Considering the above-mentioned efforts are realised and cash burn per quarter decreases along with increase in capacity utilisation (available seat kilometre guidance for Q2/Q3 FY21 is at 40%/50–70% of previous year’s respective quarters), we have built-in loss of Rs 62.7 billion in FY21, with breakeven expected in Q2 FY22..Click on the attachment to read the full report:.DISCLAIMERThis report is authored by an external party. BloombergQuint does not vouch for the accuracy of its contents nor is responsible for them in any way. The contents of this section do not constitute investment advice. For that you must always consult an expert based on your individual needs. The views expressed in the report are that of the brokerage and do not represent the views of BloombergQuint. .Users have no license to copy, modify, or distribute the content without permission of the Original Owner.

Motilal Oswal: IndiGo’s Q1 Provides Ample Clarity On The Path Ahead

Motilal Oswal: IndiGo’s Q1 Provides Ample Clarity On The Path Ahead

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