Moneycontrol
Feb 14, 2017 06:02 PM IST | Source: Moneycontrol.com

Buy Interglobe Aviation; target of Rs 1105: Axis Direct

Axis Direct is bullish on Interglobe Aviation has recommended buy rating on the stock with a target price of Rs 1105 in its research report dated February 07, 2017.

Buy Interglobe Aviation; target of Rs 1105: Axis Direct


Axis Direct's research report on Interglobe Aviation


InterGlobe Aviation (Indigo) reported RPK growth of 38% YoYin Q3– in line with our expectation; however, yields declined 16% YoY, leading to decline in EBITDAR margin to 28.9% (vs. 38.9% in Q3FY16). Demonetization adversely impacted consumer spending which led to yields declining sharply in November and December by 20% and 17% respectively (vs. 10% fall in H1FY17). However, management highlighted yields have recovered in January and are down 10% YoY.


Outlook


Pratt & Whitney (P&W), supplier of its GTF engines for A320neo, has significantly ramped up its production of these engines. With improved visibility on delivery from P&W and strong domestic traffic growth, management highlighted it may increase fleet guidance of 154planes for Mar ’18.

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