Despite losses of over Rs 1,000 crore, this stock has risen 100% in 9 months!

The aviation sector had a tough beginning this year owing to the COVID-19 pandemic, which led to visa and travel restrictions. The sector saw some improvement in September quarter after domestic flights resumed operations in a "calibrated" manner. But airlines are unlikely to recoup losses as growth is not expected to return to pre-pandemic levels at least in the medium term.  

Despite all these odds, shares of Interglobe Aviation, that operates low cost carrier IndiGo, has delivered a return of over 100 per cent in nine months. The IndiGo share price has rallied 108 per cent from its 52-week low of Rs 765.05 touched on March 24, 2020 to Rs 1,594.90 crore on December 22. The stock touched its 52-week high of Rs 1,786.95 on December 8, 2020.

Also Read: SpiceJet, InterGlobe Aviation shares fall 10% after govt bans flights from UK

On Tuesday, IndiGo shares opened sharply lower by 10 per cent at Rs 1,356.40 against previous closing price of Rs 1,507.10 on the BSE after the government banned all flights from the United Kingdom following the discovery of a new and more infectious coronavirus strain spreading in the country. However, the stock rebounded strongly in late deals and surged as much as 5.82 per cent to hit an intraday high of Rs 1,594.90. The stock settled day's trade at Rs 1,573.35, up 4.40 per cent on the BSE. Market cap of the firm rose to Rs 60,552.50 crore. Meanwhile, the BSE SENSEX ended 452 points, or 0.99 per cent higher at 46,006.

On the volume front, there was surge in buying as 3.45 lakh shares changed hands over the counter as compared to two-week average volume of 0.56 lakh shares.  

Also Read: IndiGo Q2 results: Loss widens to Rs 1,195 crore, revenue plunges 65%

Interglobe Aviation, parent company of IndiGo, has reported loss for the third consecutive quarter amid muted demand and travel restrictions imposed in wake of coronavirus pandemic. In Q2FY21, the company posted a net loss of Rs 1,195 crore as against a net loss of Rs 1,062 crore in the corresponding period of the previous year. The airline had recorded its sharpest quarterly loss in at least five years at Rs 2,844 crore in the June quarter of this fiscal as coronavirus-related restrictions hit its operations badly. The carrier's total revenue declined by 64.5 per cent to Rs 3,029.19 crore in Q2 FY21 from Rs 8,539.88 crore in the corresponding quarter last year, Indigo said in a filing to the BSE.

The airline has a fleet of 282 aircrafts. This includes 117 A320 CEOs, 116 A320 NEOs, 24 A32 I NEOs and 25 ATRs. The airline is currently providing services to 59 domestic destinations and 5 international destinations through air bubbles.

As per a recent report by ICRA, the Indian airlines' losses for the current fiscal 2020-21 (FY21) has been pegged at Rs 21,000 crore as compared to a net loss of Rs 12,700 crore reported in FY20, impacted by lower revenue and higher costs.