InterGlobe Aviation, the parent of IndiGo, is expected to report a mixed set of earnings for the first quarter of FY27, with higher airfares driving revenue growth but elevated aviation turbine fuel (ATF) prices, rupee depreciation and disruptions caused by the Middle East conflict weighing on profitability.
Analysts expect the airline's consolidated revenue to rise 19% year-on-year to Rs 24,386 crore from Rs 20,496 crore, supported by higher ticket prices and marginal growth in passenger traffic. However, net profit is estimated to decline 50% to Rs 1,084 crore from Rs 2,176 crore a year earlier.
Ebitda is expected to fall 20% to Rs 4,181 crore from Rs 5,227 crore, while Ebitda excluding forex impact is seen declining 6% to Rs 5,078 crore. Ebitdar is projected to drop 24% to Rs 4,310 crore, with the forex-adjusted figure expected to decline 8% to Rs 5,416 crore.
InterGlobe Aviation Q1FY27 (Consolidated; YoY)
- Revenue seen up 19% to Rs 24386 crore vs Rs 20496 crore
- Ebitda seen down 20% to Rs 4181 crore vs Rs 5227 crore
- Ebitda (ex-forex) seen down 6% to Rs 5078 corer vs Rs 5374 crore
- Ebitdar seen down 24% to Rs 4310 crore vs Rs 5719 crore
- Ebitdar (ex-forex) seen down 8% to Rs 5416 crore vs Rs 5866 crore
- Net profit down 50% of Rs 1084 crore vs Rs 2176 crore
- Yields up 15.7% at Rs 5.76/Km Vs Rs 4.98/Km
Despite the pressure on margins, yields are expected to improve sharply, rising 15.7% to Rs 5.76 per kilometre from Rs 4.98 a year ago, aided by higher fares and fuel surcharges.
The June quarter was impacted by geopolitical tensions in the Middle East, which disrupted international travel and led to capacity cuts across several routes.
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While fare hikes supported revenue, analysts expect elevated fuel costs and the depreciation of the Indian rupee to significantly erode profitability.
Key Monitorables
Investors will closely watch management commentary on recovery in domestic and international passenger traffic and the net impact of higher ATF prices and fuel surcharges. Investors will also look for data on the impact of the government's fuel price cap. Other important points to look out for include fiscal 2027 capacity expansion plans and progress on long-haul international operations.
What Brokerages Expect
Jefferies said domestic aviation traffic remained subdued, growing just 0-2% year-on-year during the quarter, while international traffic declined further due to capacity reductions.
The brokerage estimates IndiGo's capacity growth at around 3% year-on-year and expects the airline to prioritise pricing over volume growth during FY27. It forecasts yields to rise about 18% while fuel cost per available seat kilometre (CASK) could increase sharply due to higher ATF prices. Jefferies expects a forex mark-to-market loss of around Rs 400 crore and projects net profit of just Rs 56.9 crore for the quarter.
InCred Equities has a 'Reduce' rating on the stock and expects available seat kilometres (ASK) to grow 4% year-on-year, while revenue per available seat kilometre (RASK) rises 17%. However, it estimates fuel costs to jump around 50%, leading to a 29% decline in the RASK-CASK spread.
PL Capital expects demand to remain mixed amid geopolitical uncertainties and softer domestic traffic growth. The brokerage forecasts revenue of around Rs 24,200 crore, a load factor of 83.3% and yields of Rs 5.80 per kilometre. It also expects a forex loss of nearly Rs 1,000 crore, resulting in an Ebitdar margin of 16%, while maintaining a 'Hold' rating on the stock with a target price of Rs 4,724.
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