This is a significant decline from a profit of Rs 189 crore in the September quarter of the previous year and Rs 2,728 crore in the preceding June quarter.
Revenue from operations, meanwhile, jumped 14% year-on-year (YoY) to Rs 16,970 crore in the reporting quarter. While the market was expecting InterGlobe Aviation to report losses, the actual figure was much higher than anticipated. For instance, an ET Now poll projected the airline’s losses to be around Rs 219 crore.
In a traditionally weaker second quarter, the budget carrier reported that earnings were further impacted by challenges related to aircraft groundings and rising fuel costs.
Here is how analysts viewed the Q2 results:
Jefferies: Buy | Target price: Rs 5,100
Jefferies has maintained a buy rating on the stock, while lowering the target price to Rs 5,100 from Rs 5,225. The second quarter results were disappointing due to higher costs associated with aircraft groundings. The impact of aircraft on ground (AOG) peaked in this quarter, but capacity growth is expected to improve for IndiGo. Although short-term yields were affected, medium-term visibility appears more promising.
Kotak: Buy | Target price: Rs 5,200
Kotak has maintained a Buy rating on the stock, lowering the target price to Rs 5,200 from Rs 5,400. The second quarter results were a sharp miss, driven by the effects of aircraft on ground (AOG), which have now peaked, along with heightened seasonality. While demand trends remained healthy, weak pricing reflects a high base and increased competition. There is a strong focus on investments to support growth and profitability over time.
Nuvama: Hold | Target price: Rs 4,415
Nuvama has downgraded IndiGo to Hold, setting a target price of Rs 4,415.The near-term outlook appears challenging as capacity growth is outpacing demand growth, which is affecting PRASK. Current valuations are unsupportive; however, positive factors create a balanced risk-reward scenario. Nuvama has reduced its FY25E and FY26E EBITDAR estimates for the stock by 14% and 7%, respectively, following a moderation in their yield forecasts.
(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of The Economic Times)