IndiGo: Capacity addition, lower costs should lead to market share gains

Limited downside for IndiGo from current levels

Drop in fuel prices, easing competitive intensity, and market share gains are expected to help InterGlobe Aviation (IndiGo) improve its profitability in the coming quarters. While fuel prices are down sharply over the past three months, tariffs, too, have seen an uptick. Brokerages believe that fares have started registering a growth over the year-ago period after registering a decline earlier. Yields or ticket revenues per seat km had declined by about 9 per cent in the June and September quarters. Garima Mishra of Kotak Institutional Equities believes that shift of the festival season as well as capacity cuts because of