Buy InterGlobe Aviation; target of Rs 2281: Geojit

Geojit's research report on InterGlobe Aviation

InterGlobal Aviation Ltd (Indigo) is one of the most efficient low cost carriers (LCC) with a market share of 54% in Indian aviation sector. Q1FY23 earnings was impacted by higher fuel prices and adverse currency movement. Revenue growth was higher than expected led by strong leisure and pick-up in corporate travel. Aircraft utilization was ~80%. In the backdrop of normalization of passenger traffic, Indigo’s capacity both international and domestic has reached to precovid levels. Expect tourism & corporate travel growth momentum to continue. While given Indigo’s capacity expansion, penetration into Tier 2-3 cities and focus on route optimization will help them to gain further market share. ATF prices have started to moderate, while higher capacity utilization, cost rationalization, stable ticket price and faster replacement of older aircraft will bring down cost.

Outlook

Given healthy cash position and likely improvement in earning, we value Indigo at P/E of 17x (6.1x EV/EBITDA) and maintain to Buy with a target price of Rs. 2,281.

More Info

At 12:03 hrs Interglobe Aviation was quoting at Rs 2,058.35, up Rs 19.65, or 0.96 percent.

It has touched an intraday high of Rs 2,062.00 and an intraday low of Rs 2,030.30.

It was trading with volumes of 12,649 shares, compared to its thirty day average of 30,978 shares, a decrease of -59.17 percent.

In the previous trading session, the share closed up 1.07 percent or Rs 21.65 at Rs 2,038.70.

The share touched its 52-week high Rs 2,379.00 and 52-week low Rs 1,513.30 on 16 November, 2021 and 20 June, 2022, respectively.

Currently, it is trading 13.48 percent below its 52-week high and 36.02 percent above its 52-week low.

Market capitalisation stands at Rs 79,335.93 crore.

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InterGlobe Aviation - 010922 - geo