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Last Updated : Oct 29, 2020 11:52 AM IST | Source: Moneycontrol.com

InterGlobe Q2 preview: Losses likely to taper sequentially; yields may remain strong

The company had posted a loss of Rs 2,849.4 crore in June quarter and a loss of Rs 1,065.6 crore in the quarter ended September 2019.

 
 
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InterGlobe Aviation, the operator of low-cost airline IndiGo, is expected to report a hefty loss in the range of Rs 1,600-2,000 crore in Q2 FY21. However, the numbers may improve compared to the previous quarter.

"Improving scale of operations, cost initiatives, soft ATF prices and appreciating rupee will help narrow losses QoQ," Prabhudas Lilladher said.

The company had posted a loss of Rs 2,849.4 crore in June quarter and a loss of Rs 1,065.6 crore in the quarter ended September 2019.

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Revenue from operations may fall 69 percent year-on-year, though sequentially may see a 230 percent increase as airlines were allowed to operate at 60 percent capacity after easing lockdown measures.

"Although airlines were permitted to operate at 45 percent (later increased to 60 percent in September) of approved summer schedule for a large part of the quarter, the scale-up of operations remained below expectations due to 1) localised lockdowns 2) slot restrictions at major airports and 3) low consumer confidence due to rising incidence of COVID-19 cases," said Prabhudas Lilladher which expects IndiGo to report around 66 percent YoY decline in available seat kilometers-ASK.

However, pick up in domestic traffic post-August has been encouraging as it reached 45/50 percent of pre-COVID levels in September/October, the brokerage added.

Kotak Institutional Equities expects a 69 percent YoY decline in revenues on account of around 73 percent YoY decline in passenger volumes. The brokerage assumed IndiGo's market share at over 60 percent of the total during the quarter.

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Yields are likely to remain strong (up 10 percent for IndiGo) benefitting from pricing disciple, charter and Vande Bharat flights, according to Prabhudas Lillahder.

The stock gained 21.3 percent in the current financial year and surged 26 percent in September quarter 2020.
First Published on Oct 29, 2020 07:40 am
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