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Emkay Global Financial’s research report on InterGlobe Aviation
Indigo reported robust Q1 numbers across key metrics, as EBITDA stood at Rs48.5bn — a 14% beat, on account of 2%/1% higher-than-expected ASK/RASK at 32.7bn/Rs5.12, leading to 3% revenue beat. RPAT stood at Rs30.9bn, with core spread at Rs0.91 in Q1 vs. Rs0.2/0.7 in Q4/Q3FY23. Pax rose 12% QoQ, while yields stood strong at Rs5.18. Mgmt. retained its key FY24 guidance, despite ~40 AOGs and new P&W engine issues (<10 impacted initially). Q2 QTD yields are down ~15%, but PLF is better. We believe Indigo is well-placed on its own trajectory, given strong air traffic growth, steady net fleet adds and a competition faced with its own troubles.
Outlook
We raise FY24E/25E PAT by 31%/38%, factoring-in the tax-loss benefit (zero ETR) and higher other income. Indigo’s ~1,000 plane order-book positions it well in the long run, to benefit from India’s aviation boom; retain BUY, with revised TP of Rs3,000/sh.
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InterGlobe Aviation – 03 -08 – 2023 – emkay
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