IndiGo Shares Fall 2.5% As Weak Q1 Earnings, Rising Crude Hit Sentiment
· Free Press Journal
Shares of InterGlobe Aviation Ltd, the parent company of IndiGo Airlines, came under pressure on Friday after the airline reported weak June quarter earnings and rising crude oil prices raised concerns over future profitability.
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IndiGo shares declined nearly 2.5% in morning trade on the NSE. The stock was trading at Rs 4,899.50, down Rs 124 or almost 2.5%.
The decline in the airline’s stock came amid a sharp increase in global crude oil prices.
Brent Crude Reclaims USD 100 Per Barrel As West Asia Tensions Push Oil Prices HigherBrent crude remained close to the $100-per-barrel mark after attacks by Yemen-based Houthi militants on tankers in the Red Sea intensified concerns over supply disruptions in the Middle East.
Brent crude has gained more than 13% during the week and briefly crossed the $100 mark for the first time in two months.
Higher fuel prices remain a major concern for airlines as aviation turbine fuel accounts for one of their largest operating expenses.
IndiGo reported a significant decline in profitability for the April-June quarter as elevated fuel costs offset strong revenue growth and higher passenger yields.
IndiGo Reports ₹238 Crore Net Loss In Q1 FY27 Despite 20% Rise In Revenue From OperationsThe airline’s EBITDAR fell 34% year-on-year to Rs 37.5 billion, while EBITDA excluding foreign exchange impact declined 39% to Rs 32.9 billion.
Although IndiGo recorded a 21% year-on-year increase in yield to Rs 6, supported by higher fares, fuel expenses increased sharply to 44.1% of sales, exceeding market expectations.
The airline posted an adjusted loss of Rs 3.8 billion for the quarter, compared with an adjusted profit of Rs 21.6 billion in the year-ago period.
Despite the disappointing quarterly performance, Motilal Oswal Financial Services maintained its ‘Buy’ rating on IndiGo with a target price of Rs 6,580, indicating potential upside from current levels.