IndiGo soars 3% on strong Q2; here's what analysts say

Shares of InterGlobe Aviation, the parent company of IndiGo surged as much as 2.8% to hit an intraday high of ₹2,579.40 apiece on the BSE after the company swung in black after reporting a profit of ₹188.9 crore for the July to September quarter of FY24, against a net loss of ₹1,583.3 crore in the same period last year.

The scrip opened lower on Monday at ₹2,500.05, down 0.3%, as against the previous closing price of ₹2,508.45. At 2:25 pm, the share price of the aviation behemoth was trading 1.54% higher at ₹2,548. At present, the share price of the company is trading 7.2% lower than the 52-week high of ₹2,745.95, which the company touched on July 13 this year, while it's up 52.02% than the 52-week low of ₹1,676 touched on November 9 last year. During the session on Monday, the company’s market capitalisation stood at ₹98,299.70 crore, with 24,538 shares exchanging hands on the BSE against the two-week average of 0.12 lakh shares. In the past one month, three months and one year, the aviation stock has given 0.51%, 1.39% and 41.74% in returns, respectively.

During the quarter under review, the company's consolidated revenue surged as much as 20.6% at ₹15,502.9 crore. The airline's passenger ticket revenue witnessed a surge of 17.6% at ₹13,069 crore and ancillary revenue surged 20.05% to ₹1,551 crore. Gurgaon-based aviation company saw its capacity increase by 27.7% in the said quarter, while the number of travellers surged 33.4% to 26.3 million.

IndiGo reported a net profit of ₹188.9 crore for the July-September quarter of 2023-24 as compared to a net loss of ₹1,583.3 crore in the same quarter during the previous year. IndiGo’s profit excluding foreign exchange loss was ₹806 crore. "Including a foreign exchange loss of ₹6,171 million (₹617.1 crore), net profit for the quarter aggregated to ₹1,889 million (₹188.9 crore) as compared to the net loss of ₹15,833 million (₹1,583.3 crore) in the same quarter last year," the company said.

In its guidance for future capacity growth, IndiGo says the third quarter of the fiscal year 2024 capacity in terms of (available seat kilometers) ASKs is expected to increase by around 25% as compared to the third quarter of the fiscal year 2023.

Analysts continue to remain bullish on the aviation stock with a BUY rating. According to analysts at brokerage firm Prabhudas Lilladher, IndiGo is well placed “to strongly benefit from 1) capacity deployment (north of mid-teens capacity guidance remains intact for FY24E, despite an escalation in engine issues at P&W), 2) network expansion in domestic as well as international markets and 3) superior balance sheet (₹180bn of free cash)." The company has given a BUY rating for the aviation stock, with a target price of ₹2,816 apiece.

Analysts at Goldman Sachs have assigned a 'BUY rating' for the aviation stock with a target price of ₹2,700.

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