InterGlobe shares drop after first quarterly loss since debut

(Reuters) - Shares of InterGlobe Aviation Ltd, owner of India's largest domestic carrier by market share - IndiGo, fell as much as 3.7 percent on Thursday, a day after the company posted first-ever quarterly loss since its market debut in 2015.

Higher crude oil prices and a depreciating rupee have dented Indian airlines' profit in the world's fastest-growing aviation market. InterGlobe has been able to sustain itself so far, while rival Jet Airways Ltd is scrambling to keep itself afloat. Meanwhile, state-owned Air India is surviving on government bailout.

InterGlobe's shares have dived over 30 percent so far this year amid intense competition, which has limited its ability to raise fares, putting pressure on yields.

More than 1.2 million InterGlobe shares traded hands, as of 0437 GMT, compared with their 30-day average of 1.6 million shares.

The stock witnessed selling pressure after the company on Wednesday posted a loss of 6.52 billion rupees ($89.1 million) for the quarter ended Sept. 30 - its first since listing on the stock exchange in November 2015.

Rival airlines also took a hit on Thursday, with Jet Airways shares slipping up to 2.4 percent, while SpiceJet Ltd fell as much as 3.14 percent.

Uncertainty has led InterGlobe to hold its decision to own some Airbus A320neo aircraft. "At times when there is a little uncertainty we want to be prudent with cash," its interim Chief Executive Officer Rahul Bhatia said on a post-earnings analyst call on Wednesday. The company will continue to lease them, he added.

At least three brokerages expect the company to post a loss for the current fiscal year. Analysts at Citi forecast a net loss of about 10 billion rupees for the year, but still expect an improvement in the second half.

Citi also cut its target price to 720 rupees from 820 rupees earlier, but continued to rate the stock as "sell".

Domestic brokerage Elara Capital expects margins to recover from fiscal year 2020 due to an anticipated slowdown in capacity addition by competitors. The competitors have a higher cost base compared with IndiGo, Elara Capital said in a note.

InterGlobe Aviation had a debt of 26.41 billion rupees, as on Sept. 30. Its foreign exchange losses widened over seven-fold, leading to a 58.2 percent jump in total expenses.

($1 = 73.3625 rupees)

(Reporting by Tanvi Mehta in Bengaluru, Editing by Sherry Jacob-Phillips)