Aviation stock jumps after company’s net profit increased by 107% YoY

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Aviation stock jumps after company’s net profit increased by 107% YoY
Credit: © Reuters.

The shares of this leading airline firm gained around 2.7% reaching 52 week week-high price of ₹4,520 per share on Friday after the company registered a net profit growth of 107% year on year.

At 11:25 a.m., InterGlobe Aviation (NS: INGL ) Limited shares were trading at ₹4,297 per share, down 2.34% on the National Stock Exchange from the previous close price. The company has a market capitalization of ₹1,65,555 crore.

InterGlobe Aviation Limited reported robust financial performance, with a consolidated net profit of ₹1,894 crores in Q4FY24, reflecting a notable 107% increase from the previous year’s corresponding quarter. This growth was supported by a surge in total revenue for the same quarter, which reached ₹17,825 crores, marking an 26% rise compared to the previous year.

For the full fiscal year 2023-24, the company’s consolidated net profit stood at ₹8,167 crore, from the loss of ₹ 317 crore in the preceding fiscal year. Similarly, the total revenue for the fiscal year witnessed a 27% growth, totaling ₹68,904 crores.

InterGlobe Aviation Limited is engaged in aviation management, hotel development, and management services. The company also works in passenger and cargo management and also offers travel distribution services, such as itineraries and domestic. As of FY23, the company has a 55 percent market share in domestic passenger airlines.

Morgan Stanley (NYSE: MS ) has issued an ‘overweight’ rating on IndiGo, increasing the target price to ₹5,142 per share, which represents a 16% upside from Friday’s trading price. The brokerage noted that the airline’s Q4 EBITDA exceeded estimates by 10%. However, it anticipates flat revenue per available seat kilometer (RASK) year-on-year due to expected inflationary pressures.

The brokerage also highlighted significant upcoming changes for IndiGo, including the launch of loyalty programs and business class services, as well as plans for long-haul international flights.

As of March 2024, IndiGo’s fleet consists of 367 aircraft, with 31 owned or on finance lease, 323 on operating lease, and 13 on damp lease. For the fiscal year 2023-24, the company reported a PAT margin of 11.9%, a significant improvement from the negative 0.6% in the previous fiscal year.

IndiGo saw a 14.4% increase in capacity, reaching 34.8 billion, and a 14.0% rise in passenger numbers, totaling 26.7 million. The yield grew by 7.0% to 5.19, and the load factor improved by 2.1 percentage points, reaching 86.3%.

As of March 31, 2024, IndiGo’s total cash balance was ₹34,737.5 crore, which included ₹20,823 crore in free cash and 13,914.5 crore in restricted cash.

InterGlobe Aviation Limited shares have surged 66% over the past six months and 89% over the past 12 months.

Written by Omkar Chitnis

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