IndiGo Q4 Review – Getting Back On The Runway: Motilal Oswal

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Interglobe Aviation Ltd. reported a miss on our estimates mainly led by lower-than-estimated yield (at Rs 4.4), with revenue passenger kilometre being 15% below our estimate.

Lower passenger load factor (at 76.5%) due to Omicron impacted the revenue per available seat-kilometer adversely (down 3% QoQ) in Q4 FY22.

Management highlighted that the international flights operated in March 2022 were 100 plus and are 90% of their pre-Covid levels, in April-May 2022.

That said, according to our airfare tracker, the 30-day forward prices dipped sharply (down 6% month-on-month) in May-22 and the 15-day forward prices also dipped 5% month-on-month due to the pent-up demand with more capacity coming in.

IndiGo’s Q4 FY22 yield was lower despite higher per unit fuel prices (up 59% YoY), and depreciation in rupee (led to higher forex loss of Rs 6.1 billion).

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