Indigo crash lands

The complete impact of the pandemic is seen on aviation stocks, which are probably bearing the worst brunt of all, along with hospitality.

Indigo presented a terrible set of numbers for Q1FY21 with gargantuan net loss of Rs.2844 crore v/s Rs.1203 crore profit (YoY). This loss was on a 92% drop in revenue from operations at Rs.767 crore. The company said that the closure of scheduled operations till May 24, 2020 and lower capacity deployment thereafter on account of Covid-19, significantly impacted the quarterly results.

Its Earnings before interest, tax, depreciation, amortisation, and rent (EBITDR) loss was at Rs.1421 crore, down 151%.

Its ASK (Available Seat Kilometers), which indicates the passenger carrying capacity was down 91% at 2.1 billion and RPK (revenue passenger kilometer), which shows the number of kilometers traveled by paying passengers, fell 94% to 1.3 billion. The passenger load factor (PLF) slipped from 88.9% to 61.3%.

As at 30th June, its cash and cash equivalents stood at Rs 18,450 crore of which free cash reserve was Rs 7,528 crore and debt stood at Rs 23,552 crore.

The brokerage houses do not seem too perturbed by these numbers, with many of them maintaining the ‘buy’  and they feel Indigo is better poised to do better and get more market share, given its solid cash position.

The stock opened 4% lower at Rs.873.10 but from there, it rose upwards over 3% at Rs.938.15, with over 2 times surge in volumes.