IndiGo stock soars 5%, hits record high on strong growth outlook

In the past two months, shares of InterGlobe Aviation have rallied 18 per cent after the company reported a better than expected growth in revenue, and an increase in passenger volumes.

Shares of InterGlobe Aviation, which operates IndiGo airline, hit a record high of Rs 5,053.05, as they soared 5 per cent on the BSE in Wednesday’s intra-day trade on expectations of strong passenger growth outlook in the January to March quarter (Q4FY25). The stock surpassed its previous high of Rs 5,033.20 touched on September 12, 2024.

 

IndiGo is one of the most efficient low cost air carriers (LCCs) with a market share of 62 per cent in the Indian aviation sector.

 

India’s domestic passenger air traffic rose 11 per cent year-on-year (YoY) to 14.6 million in January 2025, while daily trends in February 2025 suggest further acceleration in traffic growth to ~17 per cent YoY. Indigo’s market share maintained its upward trend, increasing by 80 bps month-on-month (MoM) to reach a record high of 65.2 per cent in January 2025, further strengthening its dominance in the domestic space, said analysts at Emkay Global Financial Services in the sector update.

 

 

The brokerage firm expects aviation turbine fuel (ATF) prices to remain largely steady in March 2025, with minimal MoM variation, as the ~4 per cent MoM decline in crude oil prices is largely offset by an ~18 per cent MoM uptick in jet fuel spreads, and depreciation of the rupee, the brokerage firm said.

 

Meanwhile, in the past two months, shares of InterGlobe Aviation rallied 18 per cent after the company reported a better than expected 14 per cent year-on-year (YoY) growth in revenue, led by a 13 per cent YoY rise in passenger volumes. In comparison, the BSE Sensex was down 1.5 per cent during the same period.

 

Earnings before interest, tax, depreciation and amortization (EBITDA) was flat due to higher forex loss on account of INR depreciation, higher lease expenses, costs due to grounding of aircraft and airport fees.

 

The management said the company reported a total income of Rs 23,000 crore, reflecting a growth of 15 percent and profit excluding the impact of currency movement of Rs 3,850 crore. Including currency impact, the company reported a profit of Rs 2,450 crore highlighting effective execution of the company’s clear and well-defined strategy. These results were driven by robust demand in the market and the company’s ability to cater to that demand supported by lower fuel prices, the management said. 

 

The management expects this robust demand growth to continue in coming quarters. Expansion of Cargo operations supported ancillary revenue. The management guided to a healthy demand outlook and Indigo beating sector estimates with Q4 ASK (available seat per kilometer) growth of 20 per cent YoY (on a low base, though). 

 

Going ahead, passenger growth outlook remains strong in Q4, while long term outlook remains intact, led by a strong domestic network and gradual increase in the international network. The operational cost is likely to remain elevated for some more time due to the grounding of aircrafts, according to Geojit Financial Services.

 

The ratification of the New Aviation Bill is expected to positively impact the industry by encouraging global lessors and lenders to participate more actively in the Indian aviation market. Indigo is set to benefit from having the largest aircraft order book, with little over 900 aircraft slated for delivery over the next decade. This entails inducting one aircraft every week for the next decade. The management believes there are key markets that are still underserved and these present good opportunities, said analysts at Emkay Global Financial Services in the Q3 result update.