MOSL: INTERGLOBE AVIATION (Neutral)-Back in profits on better yield-Higher crude prices to weigh on profitability
InterGlobe Aviation: Back in profits on better yield; Higher crude prices to weigh on profitability
(INDIGO IN, Mkt Cap USD6b, CMP INR1108, TP INR1074, 3% Downside, Neutral)
INDIGO posting 3QFY19 revenues at INR79.2b, beating our estimate (est. INR70.1b, +28% YoY/QoQ) on better-than-estimated yield. Forex gain in the quarter stood at INR1b against gain of INR800m in 3QFY18 and loss of INR3.4b in 2QFY19. EBITDAR stood at INR16.0b (est. INR9.6b, -18% YoY). Depreciation was higher due to increase in the number of aircraft on the balance sheet. PAT stood at INR1.9b (-75% YoY, -129% QoQ) against our estimate of a loss of INR2.4b.
- Ticket yield up ~3.7% YoY: After a long time, pricing pressure in the 0-15 day ticketing window appears to have eased resulting in ticket yield rising 3.7% YoY to INR3.83.
- EBITDAR margin rises to 20.2%: Fuel cost per ASK increased by 27% YoY. However, increase in yield resulted in EBITDAR margin rising from a six-year low of 1.8% in 2QFY19 to 20.2% in the quarter (31.3% in 3QFY18).
- Aggressive ASK guidance for 4QFY19: Management has guided for ASK growth of 34% YoY in 4QFY19. Growth in domestic passengers has been lagging industry-wide capacity addition. This is expected to keep yields under pressure going forward.
- Cost increases on account of oil prices: CASK increased 14% YoY to INR3.58, while CASK ex fuel increased 5% YoY to INR1.98.
Interglobe Aviation Ltd. InterGlobe Aviation Limited, formerly InterGlobe Aviation Private Limited, is an India-based company engaged in operating passenger airline. The Company offers aviation, hospitality and travel related services. It operates through two geographic segments: Domestic, which includes air transportation within India, and International, which includes air transportation outside India. Its business lines include InterGlobe Air Transport, InterGlobe Aviation, InterGlobe Hotels, InterGlobe Technologies, InterGlobe Technology Quotient and InterGlobe Education. InterGlobe Technologies provides integrated information technology and business process outsourcing services. InterGlobe Technology Quotient distributes Travelport in India and Sri Lanka. It has four trademarks, namely, IndiGo Airways, IndiGo Airlines, IndiGo and IndiGo Air. It has around 96 aircrafts, and operates scheduled services to approximately 33 airports in India, with a maximum of around 593 domestic flights per day.
Motilal Oswal Financial Services Ltd. is a reputed name in Financial Services and Online Trading with group companies providing services such as Private Wealth Management, Retail Broking and Distribution, Institutional Broking, Asset Management, Investment Banking, Private Equity, Commodity Broking, Currency Broking, Principal Strategies & Home Finance.
Motilal Oswal Securities is a group company of Motilal Oswal Financial Service Limited which started as a stock trading company and has blossomed into well diversified firm offering a range of financial products and services. Motilal Oswal has built a reputation as the source for best stock trading company and this has taken a wealth of experience, knowledge and expertise, constantly working in tandem, over the years.
Unfortunately, this report is not available for the investor type or country you selected.
Browse all ResearchPool reportsReport is subscription only.
Thank you, your report is ready.
Thank you, your report is ready.