InterGlobe Aviation Q3 preview: Loss likely on a YoY basis, but improvement seen sequentially
Domestic passenger demand recovery and opening up of international travel remains key in the near term.
January 28, 2021 / 07:21 AM IST
Low-cost airline InterGlobe Aviation is likely to report a loss for the quarter ended December 2020 amid a decline in passenger volumes and delay in the revival of air travel demand. The company had posted a profit of Rs 490.5 crore in the corresponding period of the previous fiscal.
However, the number is expected to improve significantly on a sequential basis along with a sharp increase in revenue and operating income.
"We expect a 52 percent YoY decline in revenues on account of around 50 percent YoY decline in passenger volumes. We assume IndiGo's market share at around 53-54 percent during the quarter," said Kotak Institutional Equities which sees loss at Rs 768.4 crore for the quarter against a loss of Rs 1,194.8 crore in the previous quarter.
"We bake in YoY reduction in per unit fuel costs and 4 percent QoQ increase on a sequential hike in ATF prices. We also model reduction in employees, maintenance and other expenses. Base lease rentals and supplementary rentals remain a large cost item and drive PBT loss," the brokerage added.
Motilal Oswal expects revenue passenger kilometres (RPK) growth to fall 50 percent YoY due to delay in the revival in air travel demand, although Q3 has seen a better recovery in passenger demand owing to festive demand. The brokerage sees a loss of around Rs 538.7 crore in the quarter ended December 2020.
Domestic passenger demand recovery and opening up of international travel remain key in the near term, said the brokerage.
InterGlobe Aviation shares rallied 38 percent in the quarter ended December 2020 and gained 28 percent in calendar 2020.