IndiGo Q3 results tomorrow: What to look forward to in InterGlobe Aviation earnings report | Stock Market News

InterGlobe Aviation Ltd, the operator of IndiGo, the country’s largest carrier, will declare its Q3-FY25 results on Friday, January 24. It was a quarter of consolidation with Vistara merging into Air India in the middle of it and the integration of erstwhile AirAsia India and Air India Express complete. Yet, the true force of Air India group is yet to be seen and IndiGo has remained steadfast in its resolve to expand.

Also Read: IndiGo, Air India and Akasa Air set passenger traffic records in November

The results are coming after a loss of ₹986 crore in Q2-FY25, after seven consecutive quarters of profit. The airline had indicated softening yields, calling it normalisation. However, fares in the market and demand for the October-to-December quarter have been phenomenal, driven by the wedding season rather than festivities. However, the impact of fake bomb threat calls will be felt on the finances.

What do the numbers say?

IndiGo’s international growth was towards the end of the quarter, with little impact on overall numbers. The airline closed the quarter with 273.25 lakh domestic passengers and a market share of 63.8 per cent, both being the highest ever in its history. For context, Q3-FY24 had seen 243.1 lakh passengers and a market share of 62.1 per cent. The airline had declared a nearly ₹3,000 crore profit in that quarter. The growth in passengers is 12 per cent year on year for the same quarter, a steadfast number.

Its December market share stood at 64.4 per cent, a very strong footprint and came at the cost of Tata Group, which, despite the completion of mergers in the previous month, saw a shrinking of the market share. The October-to-December quarter has traditionally been a very good quarter for airlines as there is an increase in travel on the back of wedding season and school holidays along with fair weather across the country. Barring the COVID period, the airline has always reported a profit in Q3 and this time looks no different.

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The sliding rupee is a major worry since the airline has a lot of dollar-denominated costs and the fuel bill also goes up with the sliding rupee. The rupee is weak by 4 per cent over the previous year.

How could the results be?

The airline has inducted a handful of wet-leased planes and continues to induct A320ceos selectively. This has a significant impact on its cost base and maintenance needs. By when does the airline expect its Pratt & Whitney-powered planes to be available and if they would be put to use or returned to lessor as per the lease agreements will be interesting to see.

With the kind of airfares in the market in the previous quarter, the airline will make it the best-ever quarter in terms of revenue from operations. This would mean crossing the 20,000 crore mark for the first time. How much pressure the supplementary rentals and maintenance costs put on the balance sheet will possibly decide the profit numbers.

What to look forward to?

The airline’s share is also impacted by the tumbling markets, with the shares trading at least a thousand rupees lower than its high of INR 5,000 clocked in September. While the Nifty 50 is down 2.5 per cent over the last month, IndiGo is down over 9 per cent during the same period. While the passenger numbers have remained steady in January, the fear of another pandemic or endemic, a sudden rise in prices of oil, and US President Donald Trump’s statements over the last few weeks have all impacted in one way or another.

Also Read: Four big messages from IndiGo’s results

There could be some grand announcements coming out in the post-results call by the top management, which include announcing international routes, part of the seven new international destinations which the airline had announced it would start by March 2025, along with announcements of widebody plans, much earlier than its 2027 induction of A350s.

The airline’s commentary and guidance around the return of planes and the rate at which they are returning will be an interesting watch. This is a watershed year for the airline as it inducts the A321XLR into its fleet.

Will the best-ever quarter in terms of passenger numbers, market share and seats in the market end with the best-ever quarter in terms of earnings and profits? The number to beat is ₹3,089 crore profits which it recorded in Q1-FY24.