Indigo faces turbulence

As was expected, Indigo ended Q1FY22 with a much higher loss. On a 292% (YoY) rise in revenue from operations at Rs.3007 crore, the company reported a net loss of Rs.3174 crore, up from loss of Rs.1159 crore in Q4 and loss of Rs.2844 crore in Q1FY21.

Its earnings before interest, tax, depreciation, amortisation, and rental (EBITDAR) was a loss of Rs.1360 crore v/s loss of Rs.1421 crore (YoY).

The company management said, “Our financial results for the first quarter were severely impacted by the second covid wave. The number of passengers traveling declined sharply in the months of May and June. With the second covid wave receding, we are seeing a measured recovery in bookings for July and August.”

Apart from the pandemic, the rising fuel cost is also a major culprit. Fuel cost rose by a huge 854% (YoY). Total expenses came in at Rs.6344 crore, up 59%., which obviously led to this huge loss.

As at 30th June 2021, Indigo’s total cash balance stood at Rs.17068 crore, comprising of Rs.5621 crore free cash and Rs.11447 crore of restricted cash. The capitalized operating lease liability was Rs.25933 crore and its total debt (including the capitalized operating lease liability) was at Rs.31,690 crore.

As at 30th June 2021, the company had a fleet of 277 aircraft including 85 A320 CEOs, 122 A320 NEOs, 41 A321 NEOs and 29 ATRs; a net decrease of 8 aircraft during the quarter.

The market, obviously, is not too happy with this performance; the stock opened over 2% lower at Rs.1670 and went down to Rs.1627, over 4.5% down. Its 10% LC for the day is at Rs.1536.15.