Indigo Q3 Results: Airline stock choppy amidst double-digit revenue growth expectation

Shares of Interglobe Aviation Ltd., parent company of India’s largest airline by market share, IndiGo, opened with gains of 3% on Friday, January 24, ahead of the company’s December quarter earnings announcement. However, the stock erased all gains and are currently trading flat at ₹4,150.90.

Aviation major IndiGo is likely to see a single digit rise in its profitability in the third quarter due to AoG-related costs, which resulted in higher aircraft lease rental expenses, depreciation and financing costs.

Net profit for the quarter is seen rising 5% year-on-year (YoY), according to a CNBC-TV18 poll, while revenues are likely to grow 13% YoY.

At the operating level, earnings before interest, tax, depreciation and amortisation (Ebitda) is expected to rise by 13% YoY, while margin may rise to 27% from 26% last year.

IndiGo slipped back into the red in the previous September quarter, reporting a loss of ₹987 crore even as its revenue climbed 14% YoY to ₹16,970 crore.

Passenger Load Factor is expected at 86%. It is expected to witness a expansion in margins given decline in fuel prices.

Analysts also said that lower crude will propel profits in a seasonally strong quarter.

Available seat kilometres (ASK) is expected to see a double-digit growth reflecting the benefits of a higher year-on-year load factor.

Key factors to watch out for:

– The outlook on P&W engine-fitted aircraft (being grounded in CY25) is a key monitorable.

– The commentary on competition would be keenly monitored.

– International expansion is a key focus area for the management.

May be an image of aircraft and text

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