20 July 2019 INDIGO reported Ind-AS 116-based quarterly results. Yield for the quarter was in line with our estimate at INR4.55, leading to 45% YOY increase in net sales at to the transaction impact of Ind-AS 116 lease and supplementary expenses were replaced by depreciation (on ROU asset recognized) and finance charges (finance lease liability). Forex gain was at INR446m (v/s loss of INR2,461m in 1QFY19 and gain of INR105m in 4QFY19). PAT came in at INR12.0b (v/s our cost was higher by 70% YoY at INR11.1b owing to salary increments and new pilots hiring (currently under training). ASK increased 31% YoY to 23.3b. The company added ~18 new planes during the quarter and expects delivery of first leap of A320neo next year. RPK in 1QFY20 increased by 30% YoY at 20.7b, with RASK at INR4.04 the highest since 1QFY16. Also, cargo revenue increased significantly as INDIGO has increased the range of its cargo products.