InterGlobe Aviation Q4 Results Review: Analysts Raise Estimates After Two Profitable Quarters

This is only the third time in the last 13 quarters that the airline has registered a profit.

<div class="paragraphs"><p>An IndiGo aircraft, operated by Interglobe Aviation Ltd. (Photo:&nbsp;Praveen Thirumurugan/Unsplash)</p></div>
An IndiGo aircraft, operated by Interglobe Aviation Ltd. (Photo: Praveen Thirumurugan/Unsplash)

Analysts raised earnings estimates for InterGlobe Aviation Ltd., the parent company of IndiGo, after the company reported profit for the second consecutive quarter.

The operator of India's largest airline reported a consolidated net profit of Rs 919 crore in the fourth quarter, as against a net loss of Rs 1,682 crore over the same period last year, according to its exchange filing. A consensus estimate of analysts tracked by Bloomberg had projected the net profit at Rs 1,022 crore.

This is only the third time in the last 13 quarters that the airline operator has registered a profit, as the aviation sector was one of the worst hit by the Covid-19 pandemic.

InterGlobe Aviation Q4 Highlights (YoY)

  • Revenue rose 77% to Rs 14,161 crore, against a forecast of Rs 13,909 crore.

  • Ebitdar rose 1,627% to Rs 2,966.5 crore vs. Rs 171.8 crore.

  • Ebitda margin stood at 20.9% vs. 2.1%.

While the management reiterated 17–19% capacity growth expectations for FY24 and said the load factors will be better sequentially in the first quarter, the analysts believe the airline might outperform.

Shares of the airline's parent company traded 0.1% higher at 11.18 a.m., against a 0.1% rise in the Nifty 50.

Of the 27 analysts tracking the company, 22 maintain a 'buy' rating, three recommend a 'hold,' and two suggest a 'sell' on the stock, according to Bloomberg data. The average 12-month consensus price target implies an upside of 12.6%.

Here's what analysts said about its Q4 performance:

Motilal Oswal

  • Reiterate 'neutral' rating with a target price of Rs 2,135, implying a downside of 6%.

  • Increase revenue estimates by 12% and 17% to FY24 and FY25, respectively, on strong pricing trends in ticketing revenue.

  • Competition in the sector is expected to intensify with the resurgence of Air India and the entry of Akasa Air.

  • IndiGo is working to increase its international presence through strategic partnerships and loyalty programmes.

Emkay Global

  • Maintain 'buy' with a target price of Rs 2,700 a share, implying a potential profit of 19%.

  • Expect the company to do better than management's targets given peer issues and a strong air traffic recovery.

  • Raise net profit estimates by 40% and 16% for FY24 and FY25, respectively, factoring in better spreads and volumes.

  • Build in conservative fuel prices that can surprise positively.