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✈️ IndiGo Q1 FY26 Results – Navigating Headwinds, Flying Towards Growth!

Lesson 183/185 | Study Time: 10 Min

Course: Quarterly Result Updates & Analysis

✈️ IndiGo Q1 FY26 Results – Navigating Headwinds, Flying Towards Growth!

CMP: ₹5,933 | Quarter Ended: 30 June 2025

📌 1. Recent Insights & Management Highlights

Passenger Growth: Despite geopolitical tensions, airspace restrictions, and the tragic AI171 accident, passenger count grew +11.6% YoY to 31 million, outpacing industry growth (~6%).
New International Expansion:

Launched Mumbai–Amsterdam and Mumbai–Manchester with damp-leased widebody aircraft.
Announced upcoming London & Copenhagen routes.
Strengthened codeshare partnerships with KLM, Japan Airlines, Jetstar, Delta Airlines, and Virgin Atlantic.

Domestic Growth: Added Hindon (Ghaziabad) & Adampur (Jalandhar) routes; preparing to be launch carrier at Jewar & Navi Mumbai airports.
Fleet Actions: Net decrease of 18 passenger aircraft in Q1 as damp leases returned; inducted 8 aircraft via captive leasing unit at GIFT City.
Product Innovations: Expanded premium ‘Stretch’ seating to key regional international routes; launched co-branded Kotak Mahindra Bank credit card.
Operational Reliability: On-time performance 83.4%, technical dispatch reliability 99.88%.

📊 2. Consolidated Financial Analysis

(₹ in Cr)	Q1 FY26	Q1 FY25	YoY %	Q4 FY25	QoQ %
Revenue from Ops	20,496	19,571	+4.7%	22,152	-7.5%
Total Income	21,543	20,249	+6.4%	23,098	-6.7%
Net Profit	2,176	2,729	-20.2%	3,068	-29.0%
EBITDAR Margin	28.0%	29.7%	-1.7 ppt	28.7%	-0.7 ppt
Net Profit Margin	10.6%	13.9%	-3.3 ppt	13.3%	-2.7 ppt
Yield (₹/km)	4.98	5.24	-5.0%	—	—
Load Factor (%)	84.6%	86.7%	-2.1 ppt	—	—

Segmental/Regional Mix:

Domestic passengers up 14% YoY; international expansion continues to build share.

Margins:

Gross Margin: Impacted by lower yields & load factor.
Operating Margin: Down due to higher airport charges, depreciation, and employee costs.
Net Margin: 10.6% (vs 13.9% last year).

📈 3. Profitability, Growth & Valuation Ratios

ROE: ~24% (annualized)
ROCE: ~18% (annualized)
EPS: ₹56.31 (quarter)
P/E (TTM): ~29x at CMP ₹5,933

📍 4. Industry-Specific KPIs – Airlines

Passenger Load Factor: 84.6% (↓ 2.1 ppt YoY)
PRASK: ₹4.21 (↓ 7% YoY)
CASK ex-fuel ex-forex: ₹2.89 (↑ 1.8% YoY)
Fuel CASK: ₹1.38 (↓ 21.9% YoY on softer fuel prices)

📊 5. FY26 Estimates (Based on Trend & Management Outlook)

Metric	FY26E Growth	Comment
Sales	+12–14%	Domestic demand + strong international ramp-up in H2.
Profit Margin	9.5–10.5%	Moderation due to competitive pricing & seasonal softness in Q2.
Net Profit	+25%	Rebound expected in H2 on yield recovery & capacity utilization.

📅 Historical Trend:

FY25 Sales Growth: 17% | Profit Margin: 9.0% | Profit Growth: -11%

🔮 6. Outlook

Near-Term (Q2 FY26):

Q2 seasonally weakest for domestic travel; capacity addition only mid–high single digit YoY.
Yield environment stabilizing; gradual improvement expected Aug–Sep.

Long-Term (FY27+):

Widebody expansion, new international markets, and Indian middle-class travel boom provide multi-year growth runway.
Risks: Fuel price volatility, geopolitical tensions, competition on international routes.

✅ 7. Conclusion for Long-Term Investors

Positives:

Market leadership in India with strong brand & network.
International expansion unlocking new revenue streams.
Cost efficiency culture & strong liquidity (₹49,405 Cr cash).

Risks:

Yield pressure in competitive markets.
Seasonal weakness in domestic travel.
External disruptions (geopolitics, airspace closures).

Investment Stance:
📌 Cautiously Optimistic – Attractive for long-term investors who can tolerate quarterly volatility.

📜 Disclosure

This analysis is provided solely for informational purposes and does not constitute investment advice. Investors should perform their own due diligence before making investment decisions.

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