InterGlobe Aviation market-cap nears Rs 1-trn mark; surges 26% in 2 months

IndiGo's market cap hit Rs 97,921 crore in intra-day trade on Tuesday and was less than 2 per cent from hitting the milestone.

Shares of InterGlobe Aviation, which runs the country's largest airline IndiGo, hit a new high of Rs 2,539.80 on rallying 3 per cent on the BSE in Tuesday’s intra-day trade amid expectations of healthy earnings growth. The stock has surpassed its previous high of Rs 2,507.95, touched on June 23. In past two months, the stock has zoomed 26 per cent. 

A sharp surge in stock price of InterGlobe Aviation (IndiGo) has seen the market capitalisation (market cap) of the company reach within striking distance of hitting the Rs 1 trillion mark. IndiGo’s market cap hit Rs 97,921 crore in intra-day trade, and was just 2 per cent shy from the milestone.

For the current quarter i.e. first quarter (April-June) of fiscal year 2023-2024, IndiGo said capacity in terms of ASKs is expected to increase by around 5-7 per cent as compared to the fourth quarter of fiscal year 2023.

Meanwhile, for the financial year 2022-23 (FY23), IndiGo had reported a profit of Rs 2,654 crore, excluding foreign exchange impact. Including foreign exchange impact, IndiGo reported a net loss of Rs 306 crore for the year. The profits of the third and the fourth quarters largely compensated for the losses incurred in the first and the second quarters, the company said.

IndiGo is amongst the fastest growing low-cost carriers in the world. With a combination of robust market demand and focused execution of strategy, this was the second consecutive quarter wherein the company produced strong operational and financial results, as it reported the highest-ever fourth quarter net profit of Rs 919 crore.

Last week, IndiGo announced that it placed an order for 500 aircrafts with Airbus, in the world’s largest single-tranche aircraft acquisition deal. With an order of 480 aircraft already in place, IndiGo’s total outstanding order now stands at nearly 1,000 aircrafts. Moreover, with this new order, IndiGo’s total orders with Airbus since the carrier’s coming into being in 2006 have reached 1,330.

IndiGo’s order-book features A320NEO, A321NEO, and A321XLR aircraft, with precise combination and engine choice to be determined in the near future. Along with operating more than 300 aircrafts, IndiGo has 480 aircraft on order with 500 due for delivery between 2030 and 2035.

IndiGo can maintain operational cost reduction, fuel efficiency, and sustainability goals with the fuel-efficient A320NEO Family aircraft, enabling the fast-growing airline to sustain growth for years to come, analyst at Prabhudas Lilladher said.

Technical View

Bias: Positive

Target: Rs 2,630

Support: Rs 2,520; Rs 2,360

The stock has been trending with a bullish bias since the breakout above its 100-DMA (Daily Moving Average) in late April 2023. 

Presently, the stock is trading above the higher-end of the Bollingers Bands on the daily chart, thus indicating that the bullish bias is likely to remain intact as long as the stock holds Rs 2,520 level.

As per the monthly chart, the overall bias will remain positive as long as the stock sustains above Rs 2,360. On the upside, the stock seems on course to test the super trend line resistance at Rs 2,630.

(With inputs from Rex Cano)