Motilal Oswal: IndiGo’s Volume Recovery Remains Key To Q2 Earnings
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Motilal Oswal Report
IndiGo reported better-than-estimated available seat kilometres/revenue passenger kilometer growth in Q2 FY21, while yield was lower than estimates. This resulted in in-line revenue for Q2 FY21.
The company’s cash burn reduced to Rs 250 million in Q2 FY21 (from approximately Rs 300 million as of June 30, 2020) as the company undertook cost reduction initiatives for leasing, payroll and other costs (like non-aircraft rentals, IT costs, etc.).
Relatively smaller increase in supplementary rentals to capacity with further reduction in employee cost and huge forex gain led to beat on our Ebitda estimate at Rs 2.1 billion.
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