InterGlobe Aviation Ltd. share price target

the last one year. Promoter Rakesh Gangwal RG' with 37% stake in Indigo has asked for SEBI's intervention. Point of contention by RG are corporate governance issue, related party transactions (RPT) between Indigo & IGE group (IGE is controlled by...

Given its market leadership position, aggressive capacity addition and strong balance sheet, we maintain our positive view. We value Indigo at a P/E multiple of 23x (20x earlier) on FY21E given...

Seasonally strong 1QFY20, profitable expansion into international markets and strong focus on efficiency drive further upside. We have tightened our load factor and yield assumptions resulting in our EBITDAR for FY20/FY21E improving by 8.9/13.8% to Rs 105.1/144.2bn. In the medium term, we need to track impact of industry capacity addition on pricing and load factors. Oil remains a big variable. We continue to rate INDIGO a BUY post stronger than expected 4QFY19. Seasonally strong 1QFY20 at a time when industry capacity is low augurs well for the carrier. Profitable expansion into international markets and strong focus on efficiency drive further upside. Our TP is raised to Rs 1,846 (8x FY21E EV/EBITDAR).

We maintain BUY with a TP of Rs 1,280 (+15.6%) based on 8.0x Dec 20E EV/EBITDAR. Driven by a 27.8% YoY increase in RPKMs and a 4.5% YoY increase in yields, INDIGO reported a 28.1% YoY increase in 3QFY19 revenue to Rs 79.2bn (+7.2% vs. expectations, driving the beat). Despite revenue growth INDIGOs adj. EBITDAR plummeted 17.6% YoY to Rs 16.0bn as unit fuel costs remained elevated at Rs 1.58 (+27.3%/1.4% YoY/QoQ), while unit non-fuel costs at Rs 2.14 increased 3.6%/-6.5% YoY/QoQ. RPAT at Rs 1.9bn came in much ahead of our estimate of a loss of Rs 2.5bn.

23 January 2019 After a long time, pricing pressure in the 0-15 day ticketing window appears to have eased resulting in ticket yield rising 3.7% YoY to INR3.83. Fuel cost per ASK increased by 27% YoY. However, increase in yield resulted in EBITDAR margin rising from a six-year low of 1.8% in 2QFY19 to 20.2% in the quarter (31.3% in 3QFY18). Management has guided for ASK growth of 34% YoY in 4QFY19. Growth in domestic passengers has been lagging industry-wide capacity addition. This is expected to keep yields under pressure going forward. CASK increased 14% YoY to INR3.58, while CASK ex fuel increased 5% YoY to INR1.98. For 9MFY19, PAT stands at a loss of INR4.

InterGlobal Aviation Ltd (Indigo) is one of the most efficient low cost carriers (LCC) with a market share of 40% in Indian aviation sector. Despite robust passenger growth of 33% YoY in Q2FY19, the reported PAT loss was Rs652cr due to rise in fuel cost & forex loss. Engine issues have resolved and aircraft deliveries have picked-up with 20 aircraft deliveries this quarter. We expect earnings to pick-up in H2FY19 led by pass through of higher fuel cost and cost rationalisation....

Upgrade to BUY with a TP of Rs 935 (+5.8%) based on 8.0x Sep 20E EV/EBITDAR. Our TP has high sensitivity to crude/USD-INR and yield assumptions. Despite a 16.9% YoY increase in 2QFY19 revenue to Rs 61.9bn, INDIGOs adj. EBITDAR slumped to Rs 1.1bn (-92.9% YoY). Despite the 29.4% growth in RPKMs, revenues were hit as yield (Rs 3.33) fell 6.6% YoY. EBITDAR was impacted by higher fuel costs (rose 42.7% YoY to Rs 1.56/ASKM) and other operating expenses Rs 2.29/ASKM (+13.5% YoY). Forex loss at Rs 3.4bn further hit RPAT (Rs -6.5bn) vs. Rs 5.5bn in 2QFY18.

24 October 2018 INDIGOs ticket yield declined 10% YoY (-11% QoQ) to INR3.2, led by pricing pressure in the 15-day window (contributes ~40%) due to intense competition. increased sharply by 42% YoY in 2QFY19. Higher capacity addition in a seasonally weak quarter resulted in a poor yield. Adding to this, higher other expenses squeezed the EBITDAR margin to a six-year low of 1.8% in 2QFY19. We expect INDIGO to continue facing pricing pressure in the next few quarters to profitably deploy incremental capacity given intense competition due to industry wide capacity addition. Dismal operating performance and likely continuance of the same prompt us to cut our FY19 EPS estimate from INR35.3 to -INR22.9. We adjust our yield estimate for FY20 marginally. For 1HFY19, EPS stands at -INR16.2. For the full-year, we estimate EPS of -INR22.

InterGlobal Aviation Ltd (Indigo) is one of the most efficient low cost carriers (LCC) with a market share of 40% in Indian aviation sector. Despite robust passenger growth of 21% YoY in Q1FY19, PAT declined...

Revenue increased by 12.29% to Rs. 6511.97 Cr in Q1FY19 when compared to the previous quarter. Interglobe Aviation Ltd Q1FY19 results Comment