Interglobe Aviation (Indigo) is an A /T+1 group Airline industry company with having Face value of Rs. 10. IndiGo now operates 155 domestic flights and 20 international flights to and from Mumbai. It is India’s largest passenger airline operating as a low-cost carrier which commenced operations in August 2006 with a single aircraft and currently it operates approx. 1800+ flights daily, serves 75+ Domestic destinations, 25+ International destinations and has a fleet of 300+ aircraft. It fulfills its singular brand promise of providing “low fares, on-time flights, and a courteous and hassle-free service” to its customers. It is the largest player in the aviation sector in India with a market share of 55% and was ranked as the 6th biggest carrier in the world along with a significant share of the international market with ~12% share of total international seat capacity to or from India. It generates 92% of revenue from Sale of tickets 6% from cargo Services and 1% from In-flight sales. 1.   InterGlobe Aviation Ltd recently became India's first aviation company to cross Rs 1 trillion in market cap with its shares surging 29 % so far this year to record highs.

Fundamentals (FY22-23):

Financial Results:

Company’s Net Sales was Rs 14,160.60 crore in March 2023 up 76.55%, Quarterly Net Profit at Rs. 919.20 crore in March 2023 up 154.66% and EBITDA stands at Rs. 3,191.22 crore in March 2023 up 1320.85% as compared to March 2022.  Its EPS has increased to Rs. 23.84 in March 2023 from Rs. 43.66 in March 2022.

Key Points:

1. Indigo recently announced direct flights from North Goa, Lucknow and Ahmedabad, effective July 12 and August 11 to Abu Dhabi. To aim strengthen international connectivity and cater to the rising demand for travel to the Middle East, strengthening IndiGo's connectivity to Abu Dhabi.
2. The company recently launched three new routes to and from Pune, namely Jodhpur, Rajkot and Vadodara. Operations have already begun between Pune and Jodhpur on June 16 and Pune-Rajkot and Pune-Vadodara on July 3.
3. Indigo also announced starting of flights to Nairobi, the capital of Kenya, as part of its international expansion strategy from Mumbai. Nairobi is the carrier's 27th international and 105th overall destination in the 6E network.
4. Indigo announced an exciting collaboration with Sula Vineyards and Fratelli Vineyards to offer exclusively curated holiday experiences for all its Nashik and Pune-bound customers, respectively. With this collaboration IndiGo will provide exclusive 6Experiences going beyond just air travel, thereby adding value to the customer’s journey and giving them another reason to experience ‘India by IndiGo’.
5. IndiGo recently announced new flight connecting Mumbai-Durgapur and has resumed operations between Mumbai-Kannur effective July 01, 2023. It has also introduced additional frequencies between Dehradun-Mumbai, Leh-Mumbai, Srinagar-Mumbai, Hyderabad-Mumbai, Jammu-Mumbai, Ranchi-Mumbai, Varanasi-Mumbai, Nagpur-Mumbai, Amritsar - Mumbai routes.
6. Indigo recently introduced new daily direct flights connecting Hyderabad and Singapore starting from October 29, 2023. This expansion comes in response to the growing demand for travel between these two vibrant cities, allowing passengers to enjoy seamless and efficient connectivity.
7. Recently the company placed an order for 500 Airbus A320 Family aircraft with steady stream of deliveries between 2030 and 2035. This is not only IndiGo’s largest order, but also the largest-ever single aircraft purchase by any airline with Airbus.
8. It recently announced starting of many new direct flights such as  Hyderabad-Ras Al Khaimah, Delhi – Baku, Azerbaijan, Tbilisi, Georgia – Delhi, Mumbai – Jakarta, Kolkata to Bangkok, Bengaluru-Dubai, Kochi-Bahrain, Lucknow-Dammam, Ahmedabad-Jeddah, Chennai – Dammam (seasonal) and Kochi – Dammam (seasonal).
9. It has also announced new domestic routes between 3 domestic routes between Bhubaneswar – Mumbai, Ahmedabad-Srinagar, Mumbai to Port Blair, Kolkata to Bengaluru, Kolkata to Goa, Surat to Kolkata and Hyderabad to Kolkata.  
10. It also increased its international network by the launch of new codeshare connections via Istanbul to the United States of America. It will provide seamless access to New York, Boston, Chicago, and Washington, effective June 15, 2023, through its codeshare partnership with Turkish Airlines.
11. It has inducted its second Boeing 777 aircraft, on damp lease, which will operate to and from Mumbai- Istanbul route with the seating capacity of 400 passengers in a dual class configuration with 24 business and 376 economy class. It has been operating its first wide-body- Boeing 777 aircraft on the Delhi- Istanbul route.
12. The company has upgraded its codeshare arrangement with Turkish Airlines by adding connections to European destinations including Bulgaria, Spain, the Netherlands, Greece, Belgium, Hungary, Denmark, the Republic of Ireland, the United Kingdom, Malta, France, the Czech Republic, Israel, Austria, Switzerland, Italy, and Portugal.  

In last 3 Years the stock gave a return of 177.83% as compared to the rise of Sensex and Nifty in the same period.

The civil aviation industry in India has emerged as one of the fastest growing industries in the country during the last three years. In 2010, 79 Mn people travelled to/from/or within India and by 2017 that doubled to 158 mn, and this number is expected to treble to 520 mn by 2037. The nation’s airplane fleet is projected to quadruple in size to approximately 2500 airplanes by 2038.  Currently, the country has 131 operational airports including 29 international, 92 domestic, and 10 custom airports and the government aims to develop 100 airports by 2024 (under the UDAN Scheme) and expects to invest $1.83 bn in the development of airport infrastructure by 2026.Till date 74 airports have been developed. More than 2.15 lakh UDAN flights have operated and over 1.1 crore passengers have availed the benefits in UDAN flights so far. Indigo having the highest market share in Indian Domestic aviation industry with expansion of its wings in international industry is well poised to get the bigger part of pie filled with numerous benefits from growing aviation industry of India. Though company has negative financial parameters and performs in such a cost sensitive market, IndiGo recently made history by securing a 61.4% market share in the domestic civil aviation sector during May as per DGCA. Even Mutual Funds have increased their holding by 0.4% in the last quarter to 8.8%. Considering the highest market share, announcement of new routes and addition of 500+ aircraft by 2030 and good financial performance investors may have a wonderful flight towards profit with Indigo if they invest for long term period.

 - HET ZAVERI

- info@smartinvestment.in 

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