InterGlobe Aviation shares gains 2% post Q3 results; should you buy?


Shares of InterGlobe Aviation (IndiGo) gained over 2 per cent in Tuesday’s early trade after the company on Monday posted a 168 per cent rise in consolidated net profit at Rs 496 crore for the quarter ended December 31. The bottom line of the aviation player got a boost on the back of increasing load factor and higher operating income.

In Q3 FY19, it had posted a net profit of Rs 185 crore. During the September quarter of current fiscal (Q2 FY20), the budget airline had reported its highest ever quarterly loss of Rs 1,066 crore.

HDFC Securities maintained a ‘Buy’ call on InterGlobe Aviation with a target price of Rs 1,750.

“IndiGo’s Q3FY20 results were ahead of expectations. We reiterate our Buy on Indigo as the carrier will benefit from improving industry dynamics in the medium term. Air India has once again been put up for divestment by the GoI, crude prices remain benign which will allow for better cost management. Efficiency gains from the Neo fleet will further benefit, valuations at current levels are undemanding and any resolution of the ongoing dispute amongst the two promoters will lead to a re-rating of the stock,” HDFC Securities said.

The low-cost carrier clocked revenue from operations of Rs 9,932 crore for the quarter, marking an increase of 25.5 per cent against a 19.3 per cent increase in capacity compared to the same period last year. Total income grew to Rs 10,330 crore during Q3FY20 as against Rs 8,229 crore in Q3FY19.

The scrip traded 2.13 per cent up at Rs 1,524.60 at around 9.45 am, while the benchmark BSE Sensex was up 126 points, or 0.31 per cent, at 41,281 at around the same time.

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