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Centrum Broking Report
Interglobe Aviation Ltd.'s profit after tax at Rs 14.2 billion in Q3 FY23 significantly beat our estimate of Rs 4.9 billion due to stronger yields. Revenue per available seat-kilometre grew 28.9% YoY to Rs 5.26 (highest ever; estimate: Rs 4.9) aided by 22%YoY increase in ticket yields and increase in load factor to 85.1% from 79.7% previous year.
Yields were also supported by receipt of certain compensation from original equipment manufacturers/vendors for aircraft groundings (we estimate it could be ~9ps impact).
Available seat kilometres /revenue passenger kilometres grew 25.3%/33.8% YoY to 28.8 billion/24.5 billion. Recurring Ebitda (excluidng forex mark to market) at Rs 39.8 billion was sharply above estimate of Rs 30 billion.
IndiGo has guided for capacity growth of 45% YoY in Q4 FY23 (implies 3% QoQ growth) and ~15% growth in FY24. We expect RASK to soften QoQ in Q4 FY23 (on a relatively high base) due to seasonal weakness in traffic/fares, lower load factor and also pass-through of lower fuel costs.
Strong growth outlook, improved fare discipline and lower fuel costs are key catalysts.
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