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ICICI Securities Report
The combination of passenger load factors trending higher than 85% and lowering crude is setting the stage for a strong Q3 for Indian airlines. Propelling the sector is healthy daily domestic passenger count of ~440,000 seen in December 2023 till date.
As such, we see favorable Q3 FY24 for IndiGo more than Rs 25 billion of profit after tax, true to the seasonally strong nature of the quarter. We believe the next trigger for the stock will emerge basis clarity on the supply chain issue.
There has been continuous news flow around the same but we believe that airlines should be able to chart a clearer path if the original equipment manufacturer (Pratt & Whitney) is able to adhere to stated roadmap.
We have seen airlines recalibrating their capacity guidance for 2024, basis the same.
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