IndiGo operator InterGlobe Aviation shares jump 2% on Citi’s positive outlook; check full details

Despite the currency headwinds, Citi remains optimistic about IndiGo’s growth prospects, citing its dominant market position and robust demand outlook, it said in a report.

At 10:30 AM, shares of InterGlobe Aviation were trading at ₹4,560 apiece on the National Stock Exchange (NSE), rising 1.09%, while the company was up 1.12% on the BSE at ₹4,559.90 per share. However, the scrip settled at ₹4,528.80 per share, advancing 0.40%.

Citi, in its report, said that the air traffic demand is picking up, supported by IndiGo’s strong market share and higher passenger load factors (PLFs). Demand is expected to remain robust in Q4FY25, driven by the Maha Kumbh event, which is likely to increase traffic to major airports in Uttar Pradesh.

This is further expected to boost yields and support overall revenue growth.

However, Citi highlights currency risks as a key concern, noting that INR depreciation against the USD could impact IndiGo’s Q4FY25 results.

IndiGo’s increasing operational expenses might be impacted in the January-March quarter of FY25, as a significant portion of costs are USD-denominated. This might also result in mark-to-market (MTM) losses on capitalised lease liabilities, Citi said in the report.

Meanwhile, InterGlobe Aviation reported an 18.32% decline in its consolidated net profit to ₹2,448.8 crore in the three-month period ended December 2023, compared to ₹2,998.1 crore in the year-ago period.

Revenue from operations rose 13.6% to ₹22,110.7 crore in the third quarter of the financial year 2024-2, against ₹19,452.1 crore a year back.

Earnings before interest, taxes, depreciation, and amortisation (EBITDA) grew 0.7% to ₹5,178.6 crore in the quarter under review as compared to ₹5,143.6 crore in the corresponding period last fiscal. EBITDA margin was at 23.4% versus 26% in Q3 FY24.

The airline said that passengers increased 12.7% year-on-year (YoY) to 31.1 million in the quarter ended December 31. Unit passenger revenue (PRASK) climbed by 0.3% to ₹4.72, according to an exchange filing.