Buy InterGlobe Aviation; target of Rs 5300: Emkay Global Financial

Emkay Global Financial is bullish on InterGlobe Aviation has recommended buy rating on the stock with a target price of Rs 5300 in its research report dated January 25, 2024.

Broker Research

January 27, 2025 / 12:59 IST

Buy

Emkay Global Financial's research report on InterGlobe Aviation

Indigo posted robust results in Q3FY25, with SA EBITDA of Rs66.2bn – a 15% beat. This was driven by a 3% beat each on RASK/yields, while fuel cost and rentals were also lower. CASK ex-fuel and forex (Fx) was only 1% above our estimate, though net Fx loss was high at Rs14bn. ASK grew 12% YoY to 40.8bn (inline), while Indigo ended Dec-24 with fleet size of 437 vs 410 QoQ. Load factor was lower at 86.9%, while RPK rose 13% YoY. The mgmt guided to a healthy demand outlook and Indigo beating sector estimates with Q4 ASK growth of 20% YoY (on a low base, though). PRASK guidance is a low singledigit moderation YoY. AOGs are in the 60s now, but should fall to the 40s by early FY26, supporting spreads.

Outlook

Optically, FY25E/26E EPS is cut 25%/11% due to Fx losses, higher D/A-finance cost, but being mostly non cash, core earnings and valuation remain unchanged. We reiterate BUY with Dec-25E TP of Rs5,300.

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