InterGlobe Aviation hits air pocket over weak Q1 earnings

InterGlobe Aviation fell 6.26% to Rs 913 at 12:00 IST on BSE after net profit declined 7.38% to Rs 591.77 crore on 8.7% increase in total income from operations to Rs 4578.85 crore in Q1 June 2016 overe Q1 June 2015.

Meanwhile, the S&P BSE Sensex was up 89.23 points, or 0.32%, to 28,092.35.

On BSE, so far 1.41 lakh shares were traded in the counter, compared with an average daily volume of 66,513 shares in the past one quarter. The stock hit a high of Rs 947.25 and a low of Rs 906 so far during the day. The stock hit a record high of Rs 1,395.50 on 1 January 2016. The stock hit a record low of Rs 702 on 11 February 2016. The stock had underperformed the market over the past one month till 1 August 2016, falling 3.53% compared with 3.16% rise in the Sensex. The scrip had also underperformed the market in past one quarter, falling 9.16% as against the Sensex's 9.36% rise.

The large-cap company has an equity capital of Rs 361.20 crore. Face value per share is Rs 10.

InterGlobe Aviation's earnings before interest, taxes, depreciation, amortization and aircraft and engine rentals (EBITDAR) fell 1.46% to Rs 1553.76 crore in Q1 June 2016 over Q1 June 2015. The EBITDAR margin fell sharply to 33.9% in Q1 June 2016 from 37.4% in Q1 June 2015.

InterGlobe Aviation attributed the decline in profit margins on year-on-year basis to competitive fare pressures. Its average fare declined 10.9% to Rs 4,032 in Q1 June 2016 from Rs 4,524 in Q1 June 2015. The total passengers carried by the airline increased by 20% to 9.85 million in Q1 June 2016 over Q1 June 2015. Load factor, however, declined to 83.3% in Q1 June 2016 from Rs 87.9% in Q1 June 2015.

In a press release announcing the first quarter results, InterGlobe Aviation stated that the operation of A320neo planes in its fleet continues to be a challenge. The company is looking at slowing down taking deliveries of A320neo planes to allow the manufacturer of the engines for the A320neo planes to catch up on the production of upgraded engines.

InterGlobe Aviation is the operator of low cost passenger airline IndiGo which is India's largest airline with a market share of 38.10% in June 2016.

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