Operational revenue climbed 26% year-on-year to reach Rs 23,364 crore as stronger yields helped cushion the impact of rising costs. While brokerages including Jefferies and Nuvama trimmed their target prices due to jet fuel sensitivity, both reaffirmed buy ratings on the carrier. Operational momentum remained steady as the airline maintained an on-time performance of 91.3% across 10 major airports. IndiGo exited the September quarter holding a total cash balance of Rs 52,685 crore against total debt of Rs 87,303 crore.
Key points
Brokerages remain broadly bullish on IndiGo despite lowering target prices to reflect ele…: Brokerages remain broadly bullish on IndiGo despite lowering target prices to reflect elevated fuel and foreign exchange pressures.
Strong yield growth of 34% successfully countered part of the carrier's rising operationa…: Strong yield growth of 34% successfully countered part of the carrier's rising operational expenditures.
Capacity is scheduled to rebound in the December quarter with low single-digit expansion…: Capacity is scheduled to rebound in the December quarter with low single-digit expansion in available seat kilometres.
Sources checked by our analysis pipeline: 1
Revenue from operations, meanwhile, increased 26% year-on-year (YoY) to Rs 23,364 crore. Profitability remained under pressure due to elevated fuel costs and rupee depreciation. Looking ahead, IndiGo expects capacity growth to return in the December quarter. The airline guided for an increase in available seat kilometres (ASKM) in the low single digits during Q3 FY27 compared with the corresponding period last year.
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Should you buy IndiGo shares?
Jefferies retained its 'Buy' rating on IndiGo but lowered its target price to Rs 5,650 per share. The brokerage said the September quarter performance was soft, as expected, with a strong 34% YoY increase in yields partly offsetting higher fuel and other costs.Management addressed concerns around near-term yields and costs excluding fuel and foreign exchange. However, earnings remain sensitive to jet fuel prices. Jefferies cut its FY27 EPS estimate by 9% and its FY28 and FY29 estimates by 2%, while retaining its 'Buy' rating.
Capacity additions are expected to pick up slightly in…
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