Interglobe Q1 Misses Estimates; Brokerages Mixed on the Stock

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Interglobe Q1 Misses Estimates; Brokerages Mixed on the Stock
Credit: © Reuters.

By Aditya Raghunath -- Interglobe Aviation Ltd (NS: INGL ), the parent company of India’s largest airline Indigo, missed its Q1 FY22 estimates. Its net loss increased to Rs 3,174 crore in the June 2021 quarter compared to Rs 2,844 crore in the June 2020 period.

This was the company’s sixth consecutive loss, and the highest ever in the airline’s history. Revenues have fallen sharply in the second wave of the pandemic. Income for Q1 FY22 came in at Rs 3,170 crore.

However, brokerages are positive on the stock. Credit Suisse (SIX: CSGN ) said that COVID has had a severe impact on the sector and it would take time for the company to recover but the long-term potential of the company remains intact. It has a target of Rs 2,100 on the stock.

Morgan Stanley (NYSE: MS ) is also bullish on Interglobe with a target of Rs 2,292. It says that while the situation is unpredictable, Indigo’s lead on the competition when it comes to customers and costs make it a buy.

Centrum Broking, however, is not positive on the company. It said, “IndiGo, with its free cash balance of ₹5,600 crore and wherewithal to raise further liquidity (including by way of equity), remains in a comfortable position to tide through the current crisis. As the second wave ebbs, recovery in domestic traffic is imminent. However, at current levels, the stock already factors a robust traffic recovery in FY23 (to 90-95 per cent of pre-Covid levels) along with buoyant spreads.” It has a target of Rs 1,517 for the stock.

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