Indigo shrugs off clouds and flies

Indigo posted a 75% (YoY) decline in net profit at Rs.191 crore for Q3FY19 and despite that, the stock is today among the top five gainers on the BSE. The stock price rose 5% to Rs.1162.

The airline reported a 28% increase in total income at Rs.8229 crore. For the latest quarter, passenger ticket revenues were Rs.7,066 crore, an increase of 33% and ancillary revenues were at Rs.805 crore, an increase of 15%.

The EBITDAR or earnings before interest, taxes, depreciation, amortisation, and rent/restructuring before exceptional items was down 16% at Rs.1,681 crore while EBITDAR margin fell from 32.4% to 21.2%.

The company has blamed the fall in net profit on higher fuel prices and rupee depreciation – though QoQ, there was a fall in fuel prices, YoY it was up 31% and rupee was weaker by 11%.

The airline said it had a strong balance sheet with total cash of Rs.14,136.1 crore including free cash of Rs.4,618.3 crore and restricted cash of Rs.9,517.8 crore as on December 31 last year.

Post the numbers, brokerage houses remain optimistic and are hopeful that coming months could see a turn in the cycle. The market gave it a thumbs up as the net profit came in much higher than estimates.