IndiGo Q1 loss shrinks, revenue rises fourfold

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    MUMBAI : IndiGo’s revenue jumped more than fourfold in the June quarter from last year’s pandemic-induced low base, while losses narrowed. However, high fuel prices and a sliding rupee hit net profit, the company said on Wednesday.

    Losses at the InterGlobe Aviation Ltd-operated airlines, India’s biggest by market share, narrowed 67% from 3,174.2 crore in the year ago to 1,064.3 crore. Operating revenue rose from 3,006.9 crore in June 2021 to 12,855.3 crore.

    “First quarter of fiscal year 2023 witnessed the strongest revenue performance, resulting in the highest ever quarterly revenue of 13,018.8 crore. Headwinds caused by a depreciating rupee and higher fuel prices led to a net loss of 1,064.3 crore for the quarter ended June 2022,” the company said.

    Excluding foreign currency losses of 1,424.6 crore, net profit for the quarter stood at 360.3 crore. The airline’s Ebitda turned positive in Q1 at 716.9 crore with a margin of 5.6%, compared with a negative Ebitda of 1,360.2 crore with a negative margin of 45.2%. Ebitda stands for earnings before interest, taxes, depreciation and amortization.

    Passenger count more than tripled, while yield improved 50.3% and load factor by 20.9 points, the airline said.

    “Our revenue performance this quarter was impressive. We reported the highest ever revenue generated by the company and thereby produced profits at an operational level. However, cost pressures on fuel and foreign exchange prevented us from translating this strong revenue performance into net profitability. While our financial performance in the second quarter will be challenged by weak seasonality, the long-term revenue trend remains strong,” IndiGo chief executive Ronojoy Dutta said.

    The company said it had a cash balance of 19,069.4 crore, including 8,303.7 crore of free cash. Its debt stood at around 39,277.6 crore.

    Analysts said while IndiGo reported subdued numbers in Q1, the outlook for the company remains strong as passenger traffic is expected to grow strongly.

    “IndiGo has reported subdued 1QFY23 performance due to higher ATF (aviation turbine fuel) prices. We expect a strong revival in air passenger traffic over the next two years and factor 35% CAGR (compound annual growth rate) in ASK (available seat kilometers) over FY22-FY24E (vs. 12% CAGR over FY18-21), and an improvement in EBITDAR margin as crude prices corrected by >30% from peak level,” said Mitul Shah, head of research at Reliance Securities in a note on Wednesday. EBITDAR is earnings before interest, taxes, depreciation, amortization, and restructuring or rent costs .

    “We believe that Indigo’s strong balance sheet position will help in sustaining its market share along with pricing power, going forward, which will drive its overall profitability. Rising yield and pricing discipline will support turnaround despite higher fuel prices. We expect fuel prices to normalise by 2HFY23E,” Shah added.

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