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As IndiGo narrows loss, here's what you should do with the stock

IndiGo Q1: The company reported 327 percent year-on-year growth in consolidated revenue at Rs 12,855.3 crore in the first quarter of the financial year 2022-23.

August 04, 2022 / 09:35 AM IST
InterGlobe Aviation

InterGlobe Aviation

 
 
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Share of IndiGo parent InterGlobe Aviation fell in early trade on August 4, a day after the company announced narrowing of losses.

InterGlobe Aviation, which operates India's biggest airline, narrowed its consolidated net loss to Rs 1,064 crore for the quarter ended June from Rs 3,174.2 crore in the year-ago period.

The company reported a 327 percent growth in consolidated revenue at Rs 12,855.3 crore.

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Here is what brokerages have to say about the stock and company after earnings

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Goldman Sachs

The research house has kept a neutral rating on the stock with a target of Rs 1,990.

The results were in-line, it said, adding that high fuel costs and seasonal weakness will impact the September quarter.

The research firm sees limited upside as oil prices remain elevated, and high ticket fares impact demand. Also, competitive intensity is increasing and there’s limited fleet addition.

Credit Suisse

The brokerage house has kept an outperform rating on the stock and raised the target price to Rs 2,350.

The results were in line with estimates, it said, and the company sounded buoyant on domestic demand.

Prabhudas Lilladher

"IndiGo reported impressive performance on revenue front led by improved yield. However, soaring fuel costs and higher forex losses continue to play spoilsport," the brokerage said.

"Load factor at 79.6 percent remains considerably below pre-COVID levels of 89 percent, impacted by price hikes. We anticipate the September quarter to be a weak one impacted by seasonality and weak macros," it added.

"We believe IndiGo is better placed than peers with 55 percent market share. The company will benefit in the medium to long term from (1) demand recovery along with capacity deployment (2) local and global network expansions (3) commodity softening (4) superior balance sheet (4) better than industry cost structure and (5) strong management," the brokerage added.

"However, inflationary cost environment and rupee depreciation will continue to drag profitability. Maintain ‘hold’ with a revised target price of Rs 1,900 (Rs 1,800 earlier)," it said.

At 09:21 hours, InterGlobe Aviation was quoting at Rs 1,953.95, down Rs 21.30 or 1.08 percent, on the BSE.

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first published: Aug 4, 2022 09:35 am
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