Q4 loss of Rs871cr fails to damp investors faith in Indigo; stock soars 13% in 1 day

Indigo currently holds the largest market share of 48% in the country's aviation industry.

Jun 03, 2020 11:06 IST India Infoline News Service

Interglobe Aviation did face the shocks of Covid-19 in its business as the airline recorded a net loss of Rs870.8cr in the March 2020 (Q4FY20) compared to a net profit of Rs595.8cr in the same period of the previous year. Airlines are the worst-hit industry in the pandemic as majority countries have carried international and domestic bans including in India, since mid-March 2020.

Subsequently, EBITDA slumped to Rs86.7cr in Q4 from Rs2,210.9cr in Q4FY19. EBITDA margin has nosedived to 1% in the latest quarter against 27.9% a year ago same period.

On the other hand, revenue grew by 5.3% in Q4 to Rs8,299.1cr compared to Rs7,883.3cr in Q4FY19.

For the quarter, Indigo registered passenger ticket revenues were Rs7,130.9cr an increase of 1.3% yoy.

However, even total expenses saw an uptick in the quarter to Rs9,924.4cr up by 30.0% over the same quarter last year. CASK excluding fuel was Rs2.97, an increase of 42.1 % over the same quarter last year.

Indigo in its audit report says, "Excluding foreign exchange loss due to weakening of the rupee, primarily comprising of mark to market loss on capitalized operating lease, CASK ex-fuel has increased by 20% for the quarter on a YoY basis."

Meanwhile, fuel cost rose by 2.8% to Rs2,860.4cr against Rs2,781.3cr in Q4FY19.

Talking about the result, Indigo's CEO, Ronojoy Dutta said "In the midst of every crisis, lies great opportunity. At Indigo we are determined to emerge from this crisis stronger and more energized than ever. We are positioning ourselves to be a stronger brand, to have a more efficient fleet and a lower cost structure. We fully intend to deliver for India, the air transportation system in the world."

Overall, Indigo clocks net loss of Rs233.7cr in FY20 against a profit of Rs157.2cr in FY19. On the contrary, revenue rises by 25.5% to Rs35,756cr in the fiscal against the last year.

As of March 2020, Indigo has a total cash balance of Rs20,376.9cr involving Rs8,928.1cr of free cash and Rs11,228.8cr of restricted cash.

While the airline has total debt of Rs22,719.2cr as on March 2020. This included the operating lease liability of Rs20,284.9cr.

The airliner has a fleet size of  262 aircraft including 123 A320ceos, 100 A320neos, 14 A321 neo and 25 ATRs; a net increase of 5 aircraft during the quarter.

With the prevailing uncertainty due to pandemic, Indigo on the outlook ahead says, "we are not in a position to provide this guidance."

Rise in top-line growth, management commentary and sufficient cash balance make Indigo appealing stocks for investors.

Indigo stock has gained by nearly 13% so far on Wednesday's trading session, as it touched an intraday high of Rs1064.95 per piece on Sensex.

At around 11.30 am, Indigo stock is performing at Rs1029.50 per piece up 9% on the same index.

Indigo has resumed operations in India from May 25, 2020, after over two months lag. Indigo currently holds the largest market share of 48% in the country's aviation industry.

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