InterGlobe Aviation Ltd. share price target

We tone down IndiGo's FY22 loss by 9.4% while increase FY23/FY24 earnings by 6.4%/ 15.1% given 1) Swift recovery post 2nd Covid wave 2) permission to operate 100% domestic capacity by MoCA 3) strong yield environment across markets and 4) more air bubble arrangements aiding international operations IndiGo's 2Q losses narrowed sequentially as industry witnessed a swift recovery post 2nd Covid wave aided by 1) rising consumer confidence with...

IndiGo's Q4FY21 RASK came in at Rs 3.3, EBITDAR at Rs 7.3bn was hit by rising fuel costs and the company suffered a Rs 11.6bn net loss

27% QoQ, led by recovery in passenger growth. Profitability was impacted by higher fuel cost, depreciation, lease rentals, & lower other income. Q1FY22 profitability is likely to be impacted by Covid second wave given sharp drop in passenger growth in April & May. However, we expect passenger traffic to pick-up gradually starting from Q2FY22 & expect revenue growth to normalize in H2FY22 led by acceleration in vaccination and as impact of Covid second wave subsides. Faster replacement of old aircrafts with 15% more fuel efficient fleets will improve profitability in the medium term....

INDIGO reported an in line ASK (19.2b), PLF (70%), RPK (13.5b), and yield (INR3.7), while miss to our estimates was led by higher fuel cost. Air passenger demand touched a record high in Feb'21 after the lifting of COVID-related restrictions, although the second wave impacted demand in May'21. Cash burn rose to INR190m in 4Q (from INR150m in 3QFY21). Cash burn is expected to be higher in 1QFY22 as daily passenger demand falls to ~80,000 passengers from the highs of ~300,000 at the end of Feb'21. INDIGO expects Feb'21 demand to return by the end of 3QFY22....

The recent spike in COVID-19 cases in India weighs heavily on the Aviation sector, with flyers confidence tanking, leading to further delays in the recovery of demand. Daily passenger demand dropped by ~13% to ~246,600 passengers in the last week of Mar'21 (v/s the last week of Feb'21 when the peak was recorded), resulting in no MoM improvement in traffic (still down ~37% to pre-COVID levels)....

INDIGO: Rising fuel costs to burn earnings; cut to SELL. CBK: Earnings beat but asset quality risks persist. RBK: Weak asset quality; elevated provisions maintain SELL. MSIL: Operational performance along expected lines; maintain SELL

We increase IndiGo's FY22/FY23 earnings by 7.5%/ 7.1% and assign Accumulate rating given 1) sustained scale up of operations 2) broad based recovery in domestic demand aided by non-metro cities and 3) improving load factors on the back of rising consumer confidence IndiGo's management remains optimistic about sustainability of demand momentum and expects to operate at 75-80% of LY capacity in 4Q21 while...

InterGlobe Aviation's (IndiGo) Q3FY21 RASK stood at Rs 3.2.

INDIGO reported better-than-estimated ASK/RPK growth in 2QFY21, while yield was lower than estimates. This resulted in-line revenue for 2QFY21. INDIGO's cash burn reduced to INR250m in 2QFY21 (from ~INR300m as of 30th Jun'20) 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 est. at INR2.1b. Going forward, employee expenses are likely to increase (it stood at INR6.9b in...

InterGlobe Aviation's (IndiGo) Q2FY21 RASK was in line at Rs 3.1.