InterGlobe Aviation Ltd, the parent company of IndiGo, reported an 11.7% decrease in its profit for the first quarter of the financial year 2024-25 (Q1 FY25) on Friday. The quarter's profit after tax (PAT) was Rs 2,728.8 crore, down from Rs 3,090.6 crore in the same period last year.
Despite this drop in profit, the airline's revenue from operations increased by 17.3% to Rs 19,570.7 crore, compared to Rs 16,683.1 crore in the previous year’s quarter. IndiGo's passenger ticket revenues reached Rs 16,501.9 crore, marking a 10% rise year-on-year, while ancillary revenues grew by 13.9% to Rs 1,763.4 crore. These figures illustrate the airline’s capacity to generate substantial income from both primary ticket sales and additional services, highlighting its robust business model.
CEO Pieter Elbers highlighted that the total income increased by 18% to Rs 20,250 crore, resulting in a net profit of Rs 2,730 crore and a strong margin of around 14%. This performance underscores IndiGo's resilience and ability to generate substantial revenue growth despite the decline in quarterly profits. Elbers expressed confidence in the company’s strategies, stating that the consistent growth in revenue and income reflects the effectiveness of their operational and financial management.
Total expenses for the quarter were Rs 17,444.9 crore, up 24% from the previous year. The increased expenses were attributed to higher fuel costs, maintenance charges, and other operational expenditures reflecting the operational challenges faced by the airline in maintaining its extensive fleet and expanding its services. The significant rise in expenses underlines the ongoing cost pressures in the aviation industry, including volatile fuel prices and increased maintenance requirements for a growing fleet.
As of June 30, 2024, IndiGo held a cash balance of Rs 36,100.6 crore, with Rs 22,087.6 crore in free cash and Rs 14,013 crore in restricted cash. The capitalised operating lease liability stood at Rs 44,956.7 crore, with total debt, including this liability, amounting to Rs 52,526.4 crore. These figures indicate a robust financial position, providing the airline with the necessary liquidity to navigate the competitive aviation market. The substantial cash reserves offer IndiGo a cushion to manage operational uncertainties and invest in future growth opportunities.
During the quarter, IndiGo operated up to 2,029 daily flights and served 88 domestic and 30 international destinations. The fleet consisted of 382 aircraft, including a net increase of 15 passenger aircraft. This expansion of fleet size and network highlights IndiGo's strategic efforts to enhance its market presence and cater to the growing demand for air travel. The airline’s ability to add new aircraft and increase the number of daily flights demonstrates its commitment to scaling operations and improving connectivity for passengers.
Following the earnings release, IndiGo’s shares closed 1.37% higher at Rs 4,491.25 on the BSE. The positive market response reflects investor confidence in the airline's long-term growth prospects and its ability to manage operational challenges effectively. Market analysts have noted that despite the dip in quarterly profit, IndiGo's consistent revenue growth and strong cash position are positive indicators of its resilience and strategic direction.
In summary, while IndiGo faced a decline in profit for Q1 FY25, the airline demonstrated strong revenue growth and maintained a healthy cash balance. The expansion of its fleet and network, coupled with strategic financial management, positions IndiGo well for future growth and competitiveness in the aviation industry. As the company continues to navigate industry challenges and capitalize on growth opportunities, it remains a prominent player in the market with significant potential for sustained success.
Â
