IndiGo Soars Above 12% Despite Loss Of ₹871 Crore In March Quarter
Shares of InterGlobe Aviation Ltd, parent company of the country's biggest airline IndiGo surged in Wednesday, a day after the company reported a ₹871 crore loss in the fourth quarter (January-March). The stock hit an intra-day high of ₹1,064.95, higher by 12.62 per cent compared to Tuesday's closing. At 1:25 pm, the company's shares were priced at ₹1,020.20 apiece, up 7.90 per cent from the previous closing mark.
Analysts suggest that investors might be taking interest in the stock as, despite considerable losses, the airline reported a 5.3 per cent increase in revenues on a year-on-year basis and continues to hold ₹89,281 million in free cash.
Furthermore, according to a note by brokerage house Motilal Oswal, the airline has been operating at a 20 per cent capacity since the government allowed restricted resumption of aviation services following a complete lockdown for two months. The note said that since the government allows a maximum of 33 per cent occupancy of seats in flights, the operations will become more profitable for IndiGo in the coming days. However, it also added that the aviation sector is likely to face headwinds in terms of surplus capacity, lack of confidence among passengers to resume travel and limited demand for business travel.
The other major aviation stock, SpiceJet had gained 3.30 per cent in the afternoon trade. Meanwhile, the broader markets were up nearly 1.50 per cent, with the BSE Sensex trading 500 points higher.
