IndiGo stock zooms 10% despite widening of losses in Q4

Shares of InterGlobe Aviation (IndiGo) gained nearly 10 per cent today despite the budget carrier reporting widening of its losses in the fourth quarter of the previous fiscal. Stock of InterGlobe Aviation climbed 9.93 percent to Rs 1808.50 against the previous close of Rs 1645.05 on BSE.

Total of 0.31 lakh shares of the firm changed hands amounting to a turnover of Rs 5.47 crore. Interglobe Aviation stock is trading lower than 5-day, 20-day, 50-day, 100-day, and 200-day moving averages.

ALSO READ: IndiGo Q4 net loss widens to Rs 1,681 cr, revenue rises 29%

The stock has gained 1.07 per cent in one year but lost 13.57 per cent since the beginning of this year. Market cap of the firm rose to Rs 67,421 crore.

The aviation stock hit a 52-week high of Rs 2,379 on November 16, 2021 and a 52-week low of Rs 1,556 on March 8, 2021. The domestic budget carrier reported a widening of consolidated net loss at Rs 1,681 crore in Q4 on higher fuel costs against a net loss of Rs 1,159 crore in the year-ago period.

However, the airline saw an increase in a number of passengers by 10.3 per cent compared to the same period last year.

Revenue from operations rose 28.8 per cent to Rs 8,020.74 crore in Q4 from Rs 6,222.94 crore in the same quarter last fiscal, on strong traffic rebound in the latter half of the quarter.

The outlook for company is positive which led to a rise in stock despite widening of losses in Q4.  

Motilal Oswal said, "Free cash for the company increased to Rs 77.60 crore in 4QFY22 from INR7090 crore in 4QFY21. The company is comfortable with its overall cash position.

We believe that despite the near-term challenges, INDIGO will be out of the woods stronger than before with various preemptive measures already undertaken. However, the resurgence of airlines (Air India, Spicejet) and upcoming Akasa along with established Jet Airways would reduce Indigo's market share going forward. We value the stock at 7x FY24E EV/EBITDAR to arrive at our target price of Rs 1,779 plus 8 percent). Maintain Neutral owing to the limited upside of 8% from the current level."

The country's largest airline turned profitable in Q3 of last fiscal as it posted a profit of Rs 129.8 crore for the quarter ended December 2021. The airline had slipped into a loss of Rs 620.1 crore in the year-ago period.

Revenue from operations climbed to Rs 9,294.8 crore in Q3 compared to Rs 4,910 crore in the corresponding period a year ago.

Total income rose 84.3 per cent on an annual basis to Rs 9,480.1 crore in the third quarter of the current fiscal year.