Tuesday, October 31, 2017

IndiGo's overseas push, new aircraft orders, UDAN ambitions to keep it flying high

Interglobe Aviation (IndiGo), the market leader in domestic skies, retained its mojo as was evident from a strong set of Q2 numbers. IndiGo posted a very strong all-round performance with significant growth in revenue from operations and reported strong profit after tax. We continue to like the business on the back of operational efficiencies, capacity addition plans, and multiple growth drivers.

Quarter in a Snapshot
Revenue from operations clocked a growth of 27 percent (YoY) led by an increase in volumes (15.4 percent) supported by a rise in yield (8.9 percent). Additionally, the load factor witnessed growth of 180bps over the same quarter last year.

On the cost front, CASK (cost per available seat kilometres) ex-fuel increased by 5 percent (YoY) on the back of costs incurred on grounded nine A320neo aircraft and currency depreciation during the quarter. The management indicated that, as of now, there is no aircraft grounded as the company started getting spare engines from Pratt & Whitney.

IndiGo was able to post EBITDAR margin of 29.9 percent, up 643 bps over the same quarter last year. This was primarily driven by reduction of 612 bps in fuel costs as the percentage of revenues from operations. The management indicated that the profitability improved in the quarter on a year-on-year basis as result of better revenue management and the credit the company received from Pratt and Whitney for the engine issue.
31/10/17 Nitin Agrawal/Moneycontrol