IGI Logo

Aviation earnings are likely to remain under pressure in 2QFY27, as elevated crude and jet fuel cracks more than offset the benefit of higher fares and yields for Indigo. In renewables, Adani Green is expected to deliver strong yoy earnings growth on higher capacity, power sales, and realizations, though seasonal CUF moderation should weigh sequentially. Waaree Energies should also report stable earnings growth, supported by higher module and cell production, and improving cell utilization supporting margin expansion.

Interglobe Aviation – Higher fares support yields; elevated fuel costs to keep earnings under pressure

We estimate Indigo’s yields to increase 25% yoy to Rs5.7, supported by fuel surcharges and higher airfares amid the Middel East conflict. However, the sharp increase in crude oil prices and jet fuel cracks is expected to keep fuel cost/ASK elevated at Rs2.45 (up 70% yoy). ASK is likely to be flat yoy at 41.2bn (down 5% qoq), amid capacity rationalization in a seasonally lean quarter, while PLFs are expected to decline by ~260bps yoy to ~80.0%, resulting in RPK de-growth of 3% yoy to 33.0bn (down 9% qoq). PBT/ASK (ex-forex) is expected to turn negative, to (Rs0.15) vs Rs0.09 in 2QFY26, while net loss is estimated at Rs18.1bn, driven by elevated fuel costs and forex losses. We factor in forex loss of Rs13.0bn in 2QFY27

Adani Green Energy – Higher power sales and improved realization to drive earnings

We estimate power sales to increase 32% yoy in 2QFY27E, supported by capacity expansion to 20.3GW and improved CUFs. However, power sales are likely to decline 12% qoq owing to seasonal moderation in CUFs. Merchant tariff rates have also improved, with overall book realization expected to be up 4% qoq to Rs3.3/kWh (up 6% yoy). We estimate consolidated EBITDA to increase 39% yoy to Rs36.1bn, albeit fall 10% qoq.

Waaree Energies – Higher module and cell production to drive earnings growth

We estimate Waaree Energies’s consolidated revenue to increase 6% qoq to Rs80.5bn in 2QFY27E (up 33% yoy), supported by a 10% sequential increase in module production, and partly offset by marginally lower module realizations. Cell utilization is expected to improve to ~70%, with cell production up 18% qoq, supporting EBITDA margin expansion at ~18%. We estimate consolidated EBITDA/APAT to be up 33%/37% qoq to Rs14.5/8.1bn in 2QFY27.

For More  Emkay Global Financial Services Ltd Disclaimer http://www.emkayglobal.com/Uploads/disclaimer.pdf & SEBI Registration number is INH000000354