InterGlobe Aviation Ltd, the parent company of IndiGo, has reported its fourth quarter results and announced plans for changes in the coming years.
Jefferies has maintained a Hold rating on Interglobe’s stock while raising the target price to Rs 4,150. The company’s EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization) grew by 45% year-on-year to Rs 40 billion, compared to Jefferies’ estimate of Rs 37 billion. This performance was driven by a 7% year-on-year increase in yields, which offset cost pressures.
Interglobe announced plans to launch business class service by the end of the calendar year 2024, following the company’s recent decision to add a wide-body fleet to its operations. Jefferies noted that yield and spreads continue to benefit from the constrained capacity environment, and the run in the stock factors in these developments.
Morgan Stanley has assigned an Overweight rating and raised the target price to Rs 5,142. The company’s F4Q24 EBITDA surpassed Morgan Stanley’s estimate by 10%. However, the guidance of flat RASK (Revenue per Available Seat Kilometer) year-on-year indicates that inflationary pressure is likely to rise.
Morgan Stanley anticipates changes for IndiGo over the next few years, including the introduction of loyalty programs, business class services, and long-haul international flights. These changes may lead to near-term cost pressures, but Morgan Stanley believes that this is the right strategy as consumer preferences continue to evolve.
As Interglobe navigates the aviation landscape, its financial performance and strategic initiatives will be closely watched by investors and industry experts.
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