InterGlobe Aviation gains 6% on heavy volumes, stock nears record high

Till 10:34 AM, around 4.28 million equity shares representing 1.1 per cent of total equity of InterGlobe Aviation had changed hands on the BSE

Shares of InterGlobe Aviation (IndiGo), which operates India's biggest airline, moved higher by 6 per cent to Rs 2,268 on the BSE in Friday’s intra-day trade after nearly 1 per cent of total equity of the aviation company changed hands on the counter. The stock was trading close to its record high level of Rs 2,306.15 touched on September 22, 2021.

At 10:34 am; the stock was trading 5.4 per cent higher at Rs 2,263, as compared to 0.28 per cent rise in the S&P BSE Sensex. Around 4.28 million equity shares representing 1.1 per cent of total equity of InterGlobe Aviation changed hands on the BSE, the exchange data showed. The name of the buyers and sellers were not ascertained immediately.

In the past three months, the stock has outperformed the market by surging 35 per cent on expectation of increase in capacity in terms of Available Seat Kilometers (ASKs) or Available Seat Miles (ASM). In comparison, the S&P BSE Sensex was up 9 per cent during the same period.

For July-September quarter (Q2FY22), InterGlobe Aviation reported a  quarterly loss of Rs 1,436 crore as higher fuel expenses eclipsed a rebound in travel demand. However, on quarter-on-quarter basis, net loss narrowed from Rs 3,174 crore in Q1FY22. The company’s earnings before interest, taxes, depreciation, amortization, and restructuring or rent costs (EBITDAR) margin declined to 6.1 per cent for the quarter, compared to 14.9 per cent for the same period last year.

However, for October-December (Q3FY22), the management said capacity in terms of ASKs is expected to increase by around 40 per cent as compared to the Q2FY22 and around 45 per cent as compared to Q2FY21.

With corporate travel expected to pick up post Diwali (currently at 50 per cent of pre-covid) coupled with continued momentum from Tier 2/3 cities, IndiGo remains optimistic on 2H demand environment and is focusing on deploying additional capacity in a responsible manner. However, rising crude environment remains a worry, analysts at Prabhudas Lilladher said in result update

The brokerage firm believe IndiGo continues to remain better placed than its peers and is likely to emerge stronger post Covid given superior balance sheet (Rs 6,300 crore free cash) with option to further strengthen by Rs 3,000 crore via QIP, industry leading cost structure and strong management team.