IndiGo Q1 Results: Posts Surprise Loss As Costlier Jet Fuel, Depreciating Rupee Weigh

IndiGo reported net loss worth Rs 1,064 crore in the quarter ended June against a net loss of Rs 1,680 crore in the March quarter.

The Board of Directors of InterGlobe Aviation, parent company of IndiGo, on Wednesday, 18 May, appointed Pieter Elbers as its new Chief Executive Officer (CEO).

The operator of India’s largest airline reported a surprise loss in the first quarter even as travel demand recovered.

InterGlobe Aviation Ltd, the parent of IndiGo, reported a net loss worth Rs 1,064 crore in the quarter ended June against a net loss of Rs 1,680 crore in the preceding three months and a loss of Rs 3,179 crore a year ago, according to its exchange filing. That’s the second straight quarter of losses.

A consensus estimate of analysts tracked by Bloomberg had forecasted a net profit of Rs 1,694 crore for the first quarter.

High aviation turbine fuel prices and a depreciating rupee hurt the prospects of IndiGo—with nearly 60% market share—turning profitable. That’s because costs for maintenance and repair are borne outside of the country and are paid in foreign currencies.

Excluding a foreign currency loss of Rs 1,425 crore, net profit for the quarter aggregated to Rs 360 crore, the company said in a press release.

The fuel cost jumped 86% over the preceding quarter to Rs 599 crore. Total costs witnessed a rise of 42.5% during the same period.

Yields, a measure of average fare per passenger per kilometer, rose to Rs 5.24 a km from Rs 4.40 in the preceding quarter.

IndiGo Q1 FY23 Highlights (QoQ):

  • Revenue rose 60% to Rs 12,855 crore, against the Rs 15,338-crore forecast.

  • Ebitdar stood at Rs 717 crore versus Rs 172 crore.

  • Ebitdar margin stood at 5.6% compared with 2.1%.

The aviation sector was one of the worst-hit by the Covid-19 pandemic as first a nationwide lockdown and then local curbs to contain the spread of the virus ravaged travel.

IndiGo, after reporting net profit for the first time in two years in October-December 2021 quarter, slipped back into losses in Q4 FY22 as the emergence of the highly-transmissible Omicron variant upended a nascent recovery.

“While our financial performance in the second quarter will be challenged by weak seasonality, the long-term revenue trend remains strong,” Ronojoy Dutta, the airline’s outgoing chief executive officer, said in a statement.

Shares of IndiGo’s parent ended 1.2% higher before the results were announced compared with a 0.3% rise in the benchmark Nifty 50.

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WRITTEN BY
Vinay Khulbe
Vinay writes on automobile, aviation and developments related to mobility f... more
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