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Below is quote on Interglobe Avialtion Q1FY22 results by Mr. Jyoti Roy - DVP- Equity Strategist, Angel Broking Ltd   

Interglobe Aviation (Indigo) reported revenues of Rs. 3006.9 crore up by 292.2% YoY (-51.7% qoq) which were slightly below estimates. The company reported EBITDAR loss of Rs. 1360.2 crore which was also below estimates due to sequential decline in yield by 6% to Rs. 3.48 and sharp increase in fuel costs. Load factor for the quarter at 58.7% was mostly in line with estimates as compared to 61.3% in Q1FY21 and 70.2% in Q4FY21. As a result, loss for the quarter widened to Rs. 3174.2 crore as compared to a loss of Rs.2844.3 crore in Q1FY21 and Rs. 1,147 crore in Q4FY21.

The results for the quarter were impacted significantly due to the second Covid wave which was reflected in the lower load factor sequentially. Moreover higher fuel costs and lower yields also had an adverse impact on the Q1FY22 results. Though the Q1FY22 numbers were below estimates, we believe that the worst is over for the company and the aviation sector as we expect load factor to improve significantly from Q2FY22. However yields may take some time to catch up to Q4FY21 levels which will put pressure on margins given higher fuel costs. We believe that Indigo is best positioned in the Industry to ride out the tough times and will continue to gain market share at the expense of other players given the liquidity on the balance sheet. While near term upsides may be limited, we continue to remain positive on the stock from a longer term perspective given a very strong balance sheet and continued market share gains.

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