Analysts say the second quarter is likely to reflect a seasonally weak quarter for IndiGo, but with steady demand and stable capacity figures, the medium-term outlook remains constructive, supported by international expansion, network expansions and disciplined cost management.
Here’s what brokers recommend:
Kotak EquitiesKotak Equities expects InterGlobe Aviation to report a wider adjusted net loss of Rs 1,574 crore for Q2FY25, compared to a net loss of Rs 987 crore in the same period last year.
The brokerage forecasts net sales of Rs 17,646 crore, up 4% year-on-year but down 14% sequentially.
Operating performance is also likely to remain under pressure, with earnings before interest, taxes, depreciation and amortization (EBITDA) estimated at Rs 1,241 crore, down 24% year-on-year and a steep 76% decline quarter-on-quarter. EBITDA margin is projected at 7%, down 258 basis points year-over-year and 1,847 basis points quarter-over-quarter, indicating significant compression in profitability both year-over-year and on a sequential basis.
Kotak expects a 5% year-on-year increase in available seat kilometers (ASK), which it says is at the lower end of guidance, with a flat year-on-year occupancy rate of 83%. ASK is an important metric for measuring an airline’s passenger capacity.
The brokerage also builds in a stable annualized return with a negative impact of 50 basis points due to the mix (international growth twice as fast as domestic volumes).
It expects RASK (Revenue per Available Seat Kilometer) minus CASK (Revenue per Available Seat Kilometer) at -Rs 0.16 per ASK, against -Rs 0.38 per ASK in 2QFY25. This excludes other income and forex. The same reflects the effect of the limited capacity expansion in the seasonally weak quarter.
M&M Q2 Preview: Double-digit sales growth of up to 25% year-over-year on healthy volumes; weak ASP can negatively impact profits
nuvma
Nuvama expects InterGlobe Aviation to report a strong turnaround at the core level, with a core profit after tax (PAT) of Rs 324 crore, compared to a loss in the same quarter last year.
The company’s revenues are estimated at Rs 19,148 crore, up 13% year-on-year, while a sequential decline of 7% is likely.
On the operational front, EBITDAR (earnings before interest, taxes, depreciation, amortization and rent) is expected at Rs 3,566 crore, up 49% YoY, reflecting operational resilience even as it is likely to decline 38% QoQ.
Nuvama expects second-year EBITDAR to rise 26 due to 10% higher RPKMs or revenue passenger kilometers and a 3% increase in revenues. It expects a flat year-on-year CASK as overall cost inflation and higher currency losses are offset by lower AoG-related costs.
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Motilal Oswal
The net loss stands at Rs 661 crore, which is smaller on an annualized basis than Rs 989 crore in the same period last year. The company had reported a profit of Rs 2,161 crore in the April-June quarter.
MOFSL estimates the company’s net sales at Rs 18,317 crore, reflecting an increase of 8% year-on-year.
Operating profit is likely to show sharper improvement, with EBITDA projected at Rs 2,112 crore, up 30% year-on-year from Rs 1,618 crore in the same period last year. Accordingly, EBITDA margins are expected to rise to 11.5% in Q2FY26 from 9.5% in Q2FY2.
This broker expects ASK to reach Rs 4,100 crore, up 7.5% YoY, while PLF to stand at 84%, compared to 82.7% in Q2 2025. RPK of Rs 3,450 crore is seen to rise 9% YoY.
Indigo’s average rate fell 2% quarter-on-quarter to Rs 6,214 on one-month advance bookings in the second quarter, MOFSL noted. It fell 5% QoQ to Rs 6,304 on 15-day bookings.
Management is focused on international expansion, with the addition of new networks and code-share agreements.
ElaraCapital
Elara expects Indigo’s recurring PAT (excluding foreign exchange loss) to be Rs 1,530 crore, against a loss of Rs 750 crore in Q2FY25 due to lower costs and higher RASK, although partially offset by higher depreciation and interest costs.
(Disclaimer: The recommendations, suggestions, views and opinions expressed by the experts are their own. These do not represent the views of The Economic Times.)
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