InterGlobe Aviation Ltd., which operates IndiGo, is expected to report a soft performance in the December quarter, with profitability coming under pressure despite modest revenue growth. The third quarter is typically the strongest period for airlines, but was impacted by flight cancellations, weaker yields and currency headwinds.
On a year-on-year basis, consolidated revenue is seen rising 2.5% to Rs 22,674 crore compared with Rs 22,111 crore a year ago. This would mark the slowest revenue growth for IndiGo in the last 19 quarters, highlighting the impact of operational disruptions during the peak travel season.
Operating metrics are likely to weaken, with Ebitda estimated to decline 10% year-on-year to Rs 4,682 crore from Rs 5,179 crore. Ebitda margin is expected to contract sharply to 20.6% from 23.4% in the year-ago period, reflecting lower yields and reduced operating leverage.
Net profit is seen plunging 46% to Rs 1,318 crore versus Rs 2,449 crore in the same quarter last year, which would make it IndiGo's lowest December-quarter profit in the past four years. The rupee's depreciation is expected to further weigh on earnings, with the average exchange rate weakening to 89.88 against the US dollar from 88.79 a year earlier, raising forex-linked costs.
Yields remain a key pressure point. IndiGo's yields are estimated to decline 2.6% year-on-year to Rs 5.29 per kilometre from Rs 5.43, the weakest Q3 yield in four years. In addition, flight cancellations during the quarter are likely to have pulled down passenger load factor to around 85–86%, compared with stronger utilisation typically seen in the December quarter.
What To Watch
Investors will closely track management commentary on timelines for pilot hiring and the impact of new pilot norms on IndiGo's cost structure. Guidance on capacity expansion and cost outlook will be critical, along with updates on the airline's long-haul international operations. Any signs of a pickup in air traffic and improvement in yields will be key determinants of earnings recovery in the coming quarters.
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