Shares of InterGlobe Aviation, the IndiGo parent, tanked 8 per cent to ₹4,015 on Monday after the carrier said it expects per-passenger revenue to drop following its first quarterly loss in two years
The low-cost carrier had posted a loss of ₹986.7 crore in the second quarter ended September 30 — an unexpected development that the airline’s CEO Pieter Elbers blamed on the grounding of planes and rising fuel costs.
During intra-day trades, the share crashed 13.42 per cent when it plummeted to a low of ₹3,778.50. On the NSE, the share tanked 8.04 percent to settle at ₹4,015.
The selling pressure on the stock came on comments made by its senior management in the earnings call and brokerages cutting their target price.
"Basis the trends of October, we are estimating early- to mid-single-digit moderation in passenger unit revenues for the third quarter as compared to the same period last year," IndiGo's chief financial officer Gaurav Negi said on an earnings call Friday.
Brokerage Investec said it expects a trend of declining earnings at the airline to "persist" as fares inch lower, while costs remain high.The sentiment was also shared by analysts at Elara Capital. Both brokerages rate the stock "sell".
IndiGo's shares are down 25 per cent from the record high they hit in mid-September, with analysts pointing to falling fares and slowing growth.
Kotak Institutional Equities which maintained a buy rating on the share, reduced the target price to ₹5,200 from ₹5,400 earlier.
Goldman Sachs also reduced the target price to ₹4,800 from ₹5,300 earlier.
Analysts at Nuvama which downgraded the stock to hold cited its valuation premium vis-à-vis global peers apart from slowing domestic demand and apprehensions over overcapacity.
SpiceJet flights
Low-cost carrier SpiceJet has announced the launch of 32 flights effective from October 27.
Out of the newly announced flights, 30 will cater to domestic routes, while the rest two will link Delhi to Thailand and Phuket.
SpiceJet has announced the induction of 10 planes to its fleet by November.
