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What should investors do with Interglobe Aviation post Q2 results: Buy, sell or hold?

Revenue of the company was at Rs 5,608 crore against Rs 2,741 crore, YoY.

October 29, 2021 / 10:58 AM IST
 
 
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Interglobe Aviation share price fell 7 percent in early trade on October 29 a day after the company reported its September quarter earnings. Interglobe Aviation posted net loss of Rs 1,435.7 crore in Q2FY22 against loss of Rs 1,194.8 crore in the year ago period.

Revenue of the company was at Rs 5,608 crore against Rs 2,741 crore, YoY.

Earnings before interest, taxes, depreciation, amortization, and restructuring or rent costs (EBITDAR) was down 16.6% at Rs 340.8 crore and margin was at 6.1 percent.

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Here is what brokerages have to say about the stock and the company post September quarter earnings:

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Credit Suisse

The research house has given the stock an outperform rating on the back of fortress positioning and structural cash flows. It has kept the target price at Rs 2,700 per share.

Goldman Sachs

Goldman Sachs has maintained neutral rating on the stock with a target at Rs 2,070. The Q2 results surprised positively on yields and higher costs offset the bulk of that with net results were broadly in-line.

The broking firm sees significant improvement ahead and risk-reward is fairly balance.

Prabhudas Lilladher

Brokerage house believe IndiGo continues to remain better placed than its peers and is likely to emerge stronger post Covid given 1) superior balance sheet (Rs 63 bn free cash) with option to further strengthen by Rs 30 bn via QIP 2) industry leading cost structure and 3) strong management team.

Value the stock at 9x Sep23 adj. EV/EBITDAR and arrive at a target price of Rs 1,950 (earlier 1,850).

Motilal Oswal

Despite near term challenges, Indigo will emerge from the pandemic stronger than before, with various pre-emptive steps already undertaken. Risk to our call could be a sharp turnaround in the domestic passenger market demand and sustainability of yields at current levels.

We maintain our neutral rating owing to limited upside in the stock.

At 09:18 hrs Interglobe Aviation was quoting at Rs 1,912.45, down Rs 84.35, or 4.22 percent on the BSE.

Disclaimer: The above report is compiled from information available on public platforms. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.



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first published: Oct 29, 2021 10:58 am
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