Flies high with profit but Interglobe stock witnesses heavy selling

InterGlobe Aviation which operates India's largest airline IndiGo announced its quarterly results on Thursday. It is also the largest low fare carrier in India. Till December 2015 it has a market share of 35.6 per cent. The company continues to perform well owing to an increase in fleet size; robust passenger demand; and low fuel prices.

On financial front, the consolidated net revenue from operations of IndiGo reached to Rs 4408 crores in Q3FY16 compared to Rs 3939 crores in Q3FY15, an increase of 11.9 per cent year on year (YoY). EBITDA stood at Rs 1673 crores this quarter compared to Rs 1283 crores in Q3FY15, an increase of 30.39 per cent YoY. The EBITDA margin of company stood at 38.9 per cent this quarter compared to 33.3 per cent in Q3FY15. The increase in EBITDA is due to the decrease in fuel costs, which helped company in reducing expenses. The fuel cost decreased by 19.8 per cent to Rs 1166 crores from Rs 1453 crores in Q3FY15. The total expenses increased by 9.1 per cent to Rs 3475 crores in Q3FY16 from Rs 3186 crores for the same period last year. Net profit stood at Rs 657 crores in Q3FY16 compared to Rs 532 crores in Q3FY15, an increase of 23.49 per cent YoY.

The nine month ending consolidated net revenue from operations increased by 19.1 per cent and reached to Rs 12354 crores compared to Rs 10373 crores for thr same period last year. The EBITDA stood at Rs 4125 crores, an increase of 69.52 per cent. Net profit for nine month period stood at Rs 141 crores compared to Rs 73 crores, an increase of 94 per cent for the same period last year.

Lower fuel prices enabled IndiGo to lower the fares charged to customers, stimulating market demand and increasing the propensity of people to travel. The passenger revenue of IndiGo reached to Rs 3764 crores in Q3FY16 from Rs 3437 crores, an increase of 9.5 per cent YoY; and ancillary revenue increased by 27.1 per cent to Rs 515 crores in Q3FY16 from Rs 405 crores for the same period last year.

The company, which raised Rs 3010 crore through initial public offering (IPO) in November, has outperformed rivals Jet Airways and SpiceJet by keeping costs low and now is a most profitable airline. The scrip fell by 12.13 per cent to Rs 1045 abiding to heavy selling after the good results of company were declared.

Reacting to IndiGo's numbers, Spicejet and Jet Airways are also witnessing heavy selling pressure as investors are running to book profits in these stocks, creating an overall negative market scenario. The scrip of Spicejet and Jet Airways is down by 2.08 per cent and 3.50 per cent respectively, from previous close. Spicejet will also declare its quarterly numbers today, a factor that will decide the future trend for the aviation stocks.