Interglobe Aviation Limited, popularly known as IndiGo, is a low-cost airline based in Gurgaon, India. It is the largest airline in India in terms of passengers and fleet size.
The market capitalisation of Indigo, as of March 2018, is more than Rs.48,000 crore.
Company’s Wealth and Recent PerformanceQ1 Results FY19
From the unaudited standalone financial results for the quarter ending June 2018 in the financial year 2018–2019, we can see the following:
- The total income of the company grew to Rs.681.83 crore compared to Rs.609.76 crore in the previous quarter.
- The total income of the company was boosted by the solid increase in the revenue from operations. While revenue from operations was Rs.579.91 crore in the preceding quarter, it was Rs.651.19 crore in the current quarter.
- Expenses rose again with Rs.678.69 crore being the expenses for the current quarter while the same was only Rs.593.14 crore in the previous quarter.
- Profit before tax decreased from Rs.16.62 crore in the previous quarter to Rs.3.13 crore in the current quarter.
- The profit for the period was Rs.2.77 crore compared to Rs.11.76 crore in the previous quarter.
From the annual report released by the company for the financial year 2017–2018, we can see the following:
- The total revenue from operations was Rs.2,302.08 crore in the FY18. This was a solid increase from the total revenue for the preceding year which was Rs.1,858.05 crore.
- Other income grew from Rs.78.90 crore in FY17 to Rs.94.68 crore in FY18.
- The total income of the company grew from Rs.1,936.95 crore in FY17 to Rs.2,396.77 crore in FY18.
- The profit before tax also showed an increase of almost Rs.100 crore.
- Profit after tax was Rs.224.23 crore in FY18 compared to Rs.165.91 crore in FY17.
- The total assets of the company grew from Rs.1,520.97 crore in FY17 to Rs.2,112.93 crore in FY18.
- Total current liabilities increased from Rs.478.46 crore in FY17 to Rs.612.29 crore in FY18.
From the audited statement for the standalone financial results for the final quarter of the financial year spanning 2017–2018, we can observe the following:
- The total income of the company dropped to Rs.605.68 crore in the final quarter of FY18, down from Rs.644.97 crore in the previous quarter.
- The total income is calculated by taking into account the revenue from operations and other income. Of these, the loss in revenue from operations was much higher with the difference in value between the third and the fourth quarters of FY18 being Rs.37.87 crore.
- The total expenses of the company rose from Rs.537.81 crore in the third quarter of FY18 to Rs.589.06 crore in the fourth quarter of FY18.
- Some of the highest increases in the airline’s expenses stemmed from aircraft fuel expenses and employee benefits expenses.
- Profit before tax decreased from Rs.107.15 crore in the third quarter of FY18 to Rs.16.62 crore in the fourth quarter.
- The profit for the quarter was Rs.11.76 crore compared to Rs.76.20 crore in the previous quarter.
- IndiGo’s revenue from operations for the December quarter was reported to be Rs.61,778.82 million - a 23.9% increase over the corresponding quarter last year.
- EBITDAR for the quarter was Rs.20,018.99 million, a 37% increase over the same period last year. Subsequently, profit before tax for the same period was reported to be Rs.10,715.99 million which is a 78% increase over the December quarter of 2016. Profit after tax for the quarter also improved by 56.4% Y-o-Y, to stand at Rs.7,620.30 million.
- This surge in profit can be attributed to better revenue management in addition to the credits Indigo received from their manufacturers. The December quarter also saw the addition of 12 aircraft to IndiGo’s fleet, taking the total tally to 156 aircraft.
- IndiGo’s total cash balance, as of December 31, 2017, is Rs.1,38,873.54 million, while the debt is Rs.24,326.35 million. It is worth noticing that this entire debt is directed towards aircraft related operations.
IndiGo Stock Trends in 2018
- On January 1, 2018, IndiGo share price was Rs.1,205.95 on NSE and Rs.1,202 on BSE. The stock price remained above this level for most of the month, except for a short period when the price entered the Rs.1,100 territory. The closing price at the end of the month was Rs.1,214.95 on NSE.
- In February, international markets underwent serious turbulence which drastically affected Indian stocks. IndiGo was not immune to this and as a result, the stock price went down through the first week. However, the markets recovered after this fall and the share price went up to cross Rs.1,200. IndiGo stocks made more gains in the final few days of the month as they managed to cross Rs.1,300. The closing price on February 28 was Rs.1,335.70 on NSE.
- The share price was about Rs.1,332 at the beginning of March 2018. The price of the stock declined over the first few weeks and did not gain until about the last week of the month. During the last week, The price gained a little to close for the month at about Rs.1,290.
- The stock gained at price over the course of April 2018 until about the last week of the month. During the last week of the month, the price dropped with the final price for the month being about Rs.1,402.
- In May 2018, the price of the stock dropped for two weeks before it gained a little and stabilised a little during the last few days of the month. The final price for May 2018 was about Rs.1,219.
- The share price peaked on 19 June 2018 at about Rs.1,228. The stock then declined in price over the course of the month to close at about Rs.1,088 on the last day of the month.
- The price held steady for most of July 2018 before declining just past the mid-month mark. The final price for the month was about Rs.929.
- The price of the stock increased over the course of the first week of August 2018 and held steady till about the third week at which point it declined again. The final price for August 2018 was about Rs.928.
IndiGo Stock Trends in 2016 and 2017
- IndiGo stocks at the start of 2016 were trading at around Rs.1,340 on NSE and BSE. The month of January marked the start of a downward trend for the airline stocks as the share price fell dramatically over the course of the next couple of weeks. By the end of the second week, stocks were at levels between Rs.1,200-1,300. This was followed by a sharp nosedive which took the price in the Rs.800 territory by the end of the month. The price fell further in February but managed to recover slightly, although it was nowhere close to recouping its previous gains. It was not until the second half of March that the stocks showed signs of recovery. The closing price at the end of the month was Rs.873.20.
- The price continued to rise steadily through the month of April. By the end of the month, IndiGo shares were changing hands at levels above Rs.1,000 - a rally that continued for most of May. The price did go below Rs.1,000, although it was only for a short while. Things did not change much in June either. The month started with shares trading at above Rs.1,000 and remained that way for most of the month. The closing price on June 30, 2016, was Rs.1015.35 on NSE.
- July was a rocky month for the investors as the stocks commenced another downward run. Shares had slipped in the Rs.900 territory, although the nosedive did not take place until early August, when a disappointing Q1 FY17 performance contributed to the sharp fall in price. By mid-August, IndiGo stocks were trading at around Rs.800-850 on NSE and BSE. The price recovered slightly towards the end of the month and it managed to cross Rs.900 in September, driven by company updates and the announcement of final dividend of 150%. The closing price at the end of the month was Rs.915.70 on NSE.
- The month of October witnessed some stability as the IndiGo stocks were cautiously traded at levels between Rs.920-950, although they did manage to breach the upper limit to find new highs during intraday trading. In November, post demonetisation, the share price was once again back in the Rs.800 territory and it remained there till the end of the year. The closing price on December 29, 2016, was Rs.815.55 on NSE.
- The month of January was a positive one for the investors as IndiGo stocks attempted to make new gains after weeks of disappointing spell. In the second half of the month, the shares were back at levels above Rs.900, but only to lose this progress in February. The real upward trend did not start until March, when the stock price managed to cross Rs.1,000 again, driven by company updates. The closing price at the end of the month was close to Rs.1,050 on NSE and BSE.
- IndiGo share price continued to move up in the month of April as well, with the price breaching Rs.1,100 level in the second half of the month. This continued through the half week of May, following which, the shares dipped slightly and went below Rs.1,000. However, they recovered by the end of the month and continued to soar through the month of June. By the end of June, IndiGo stock price was fluctuating at levels above Rs.1,200, driven by the rise in domestic air traffic and the fall in crude oil price.
- Things did not change much for the investors in July either. The news of the airline planning low-cost long haul international flights kept the stock price steadily above Rs.1,200. In August, a final dividend of 340% was announced by the airline, which in conjunction with the company updates, helped the share price cross Rs.1,300, albeit it was only for a brief period. The price dipped slightly towards the end of the month and this fall continued through the month of September. On September 29, 2017, IndiGo shares closed trading at Rs.1,096.80 on NSE.
- Things remained fairly stagnant until the second half of October, when the shares commenced another bullish run. Between late October and early November, the shares were traded at levels above Rs.1,200. By mid-November, the stock price fell again and went down in the Rs.1,100 territory. It remained this way till late December, when the stocks managed to cross Rs.1,200 again. The closing price at the end of the year was Rs.1,205.50 on NSE and BSE.
Should you invest in IndiGo?
- A report by the Federation of Indian Chambers of Commerce & Industry has stated that the Indian aviation market has the potential to be in the top 3 worldwide, by the year 2020. Needless to mention, the aviation sector in India is booming owing to the advent of budget airline carriers. IndiGo, being the largest low-cost airline in India in terms of fleet size and passenger carried, is placed strategically to benefit from this growing sector. Furthermore, in its roughly 12 years of operations, it has managed to achieve a market share of 39.7% as of February 2018, which is a terrific feat.
- The company is in the process of expanding its fleet. In addition to this, its financials are strong as the company has had 9 consecutive years of profitable operations. It is among the most preferred airlines in India - an image that is unlikely to take a hit anytime in the near future. It is also the most profitable company among its peers in the transport & logistics sector. Therefore, if you are looking for a stock from this sector to choose for your diversified portfolio, then IndiGo may seem like an appealing option.
- However, it is important to remember that airline stocks depend heavily on the price of crude oil, since the price of aviation turbine fuel (derived from crude oil) comprises a significant chunk of costs for an airline company. Hence, if the price of crude oil goes down, the airline stocks will soar and vice-versa. This is one of the key factors that affects the profitability of an airline company. IndiGo’s quarterly performance over the years may seem a bit volatile, but it has managed to stay profitable in the long run. Furthermore, as we move towards renewable sources of energy, the price of crude oil may take a hit which, in turn, may benefit the aviation sector. Whatever may be the case, it is strongly advised to consult your financial planner and do a thorough research before investing. Alternately, you can also look into mutual funds which have holdings in IndiGo shares.
IndiGo, also known as Interglobe Aviation Limited, is a low-cost passenger airline and India’s largest passenger airline in terms of passengers carried and fleet size, with a market share of approximately 40% as of February 2018. The airline currently operates flights across 50 destinations, 42 of which are domestic and the rest are international. It is known for its high operational reliability and an award winning service, making it one of the most reliable and preferred airlines in India.
History of the Company
IndiGo was incorporated in 2006 as a private company formed by Rahul Bhatia of InterGlobe Enterprises and Rakesh Gangwal, an NRI based in the United States. The airline placed an order for 100 Airbus A320-200 aircraft in June 2005 with plans to commence commercial operations in mid-June 2006. By the end of 2007, the airline had 15 aircraft and by 2010 December, IndiGo had become the third largest airline in India. In 2011 January, the airline got the permission to operate international flights after finishing five years in domestic operations. At the end of March 2012, IndiGo was the most profitable airline in India. In 2015 August, the airline placed the order for 250 Airbus A320neo aircraft and in October that year, the company went public through its first initial public offering.
Mr. Rahul Bhatia - Promoter & Non-Executive Director, Interglobe Aviation Limited
Mr. Bhatia has played an important role in the formation of InterGlobe Enterprises whose flagship business was air transport management. He has been a part of the travel industry for more than 25 years and has developed many new strategies and business initiatives for IndiGo. He holds a degree in Electrical Engineering from the University of Waterloo, Ontario, Canada.
Mr. Devadas Mallya Mangalore - Chairman, Non-Executive Independent Director - Interglobe Aviation Limited
Mr. Mallya obtained his degree in engineering from the University of Mysore, which he followed with a post-graduate diploma in Industrial Management from the Indian Institute of Science, Bengaluru. He is currently a part of the board of directors of several organisations and has also served as the Chairman and the Managing Director of Bank of Baroda. He has been a part of the banking sector for more than 35 years and worked in various capacities in his illustrious career.
Interglobe Aviation Limited Listings in NSE, BSE, and Indices
IndiGo stocks are available for trading on the National Stock Exchange Limited and the Bombay Stock Exchange Limited. The codes for the same are as follows:
BSE - 539448
NSE - INDIGO
ISIN - INE646L01027
SECTOR - Transport & Logistics
In addition to the listings, IndiGo comprises the following stock market indices in India:
- NIFTY 100
- NIFTY 200
- NIFTY 500
- S&P BSE 500
- S&P BSE 200
- S&P BSE AllCap
- S&P BSE Infrastructure
Registered and Corporate Office
Central Wing, Ground Floor,
Thapar House, 124, Janpath
New Delhi - 110-001, India
Level 1, Tower C, Global Business Park,
Gurgaon - 122-002
Stocks vs. Mutual Funds: here's what we recommend
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