2 weeks Ago By Arjit Saxena
On Monday, shares of Indigo crashed more than 8% to trade at Rs 4,012.75. This downturn followed the airline’s announcement of a net loss of Rs 987 crore for the quarter ending September 30, 2024, compared to a net profit of Rs 189 crore in the same period last year.
Despite this setback, Indigo reported a 14% year-on-year increase in revenue from operations, amounting to Rs 16,970 crore for the quarter. Following the Q2 results, Kotak Securities maintained a 'Buy rating on Indigo's stock. The brokerage stated that the low Q2 result was caused by temporary challenges.
They mentioned seasonal issues caused by a substantial increase in demand and supply the previous year. The Kotak Securities report said, "Miss amplified by transient issues, investing for the long term and another overhang was the heightened seasonality in the context of the sharp uptick is demand/supply in the prior year." The report added, "We cut FY27 estimate by 10 per cent and roll forward to Rs 5,200 fair value.
We value Indigo at 19.5x two year forward earnings from 20x earlier." In positive developments, Indigo has maintained a higher load factor than the industry average and is enhancing customer loyalty through its blue-chip loyalty program, which could help improve yields.
However, the results also announced a 22% miss in EBITDA, largely driven by a 33% shortfall in other operating income, with fuel consumption per available seat kilometer remaining high. The 52 week high and low of the share is Rs 5,033.20 and Rs 2,415 respectively.
According to the BSE analytics, the shares have given negative returns of 19.03 per cent in the last 1 month. (Disclaimer: The above article is meant for informational purposes only, and should not be considered as any investment advice.
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