IndiGo Q1 profit rises 37% to Rs811 crore
New Delhi: InterGlobe Aviation Ltd-run IndiGo on Monday reported a 37% increase in net profit to Rs811.14 crore for the quarter ended June. It’s the highest quarterly profit posted by an Indian airline ever.
The profit was notched up on a 25.6% increase in revenue to Rs5,752.91 crore, the airline said in a filing with BSE Ltd after the close of trading.
“We are pleased to report our highest ever profit after tax this quarter,” Aditya Ghosh, the airline’s president said in a note. “This strong financial and operational performance allows us to stay focused on growing our network.”
Securities house Edelweiss Securities Ltd, in a 5 July report, forecast IndiGo to post a profit of Rs682.6 crore in the June quarter on a 23% rise in revenue. Aviation consulting firm CAPA had expected IndiGo to post a profit of Rs650-700 crore
SBICAP Securities Ltd, in a 11 July report, projected a quarterly profit of Rs785.1 crore for IndiGo.
The airline has a fleet of 135 planes including 22 A32neos and operates about 937 daily flights to 46 cities including 7 international.
IndiGo said it has a cash balance of about Rs10,185 crore and free cash of about Rs5,189 crore. It had an aircraft debt of about Rs2,524 crore.
In an analyst call Monday evening the airline elaborated on the road ahead.
The airline said it is still suffering because of engine issues on A320neo planes and is in talks with Pratt & Whitney.
There have been days the airline had to ground as many 9 planes of its 22 Neo planes because of lack of spare engines, Ghosh said.
The airline does get some compensation from Pratt and Whitney but operational disruption has been challenging and the airline expects the required design changes in the engine will take one year.
IndiGo was supposed to have 36 A320neos by now but has only 22 because of engine issues forcing it to lease the more costly A320 planes from lessors.
As a result the airline will not meet the target of 170 plane fleet by March, Rohit Philip, its chief financial officer said in the same call, without specifying the new fleet size of the compensation received from Pratt and Whitney. The airline was on target to launch regional ATR operations by end of the year adding seven planes by March, he added.
IndiGo typically leases planes for 6 years and then replaces them with new planes.
But now the airline will buy Neos as it does not see any new plane technology coming in the next few years, Phillip said the aircraft were giving 15% fuel efficiency.
The airline is also set for its annual general meeting (AGM) in the last week of August where it will take approvals for reducing the promoters shareholding to meet regulatory norms on minimum public shareholding
Phillip said the airline has plans for international low cost long haul flights but this “will be a much slower process” without Air India.
The government is currently reviewing the process of Air India disinvestment in which IndiGo has shown its interest.
Analyst welcomed the results. “This is the highest quarterly profit by any airline in India- listed or unlisted,” CAPA said in an email, “Both passenger load factor and yield increased – which continues to surprise. Not sure as yet if this is a directional shift.”
IndiGo’s share were up 0.31% at the Bombay Stock Exchange on Monday to end at Rs 1290.75 apiece on a day Sensex was up 0.63% to end at 32,514.94 points.