INDIGO - InterGlobe Aviation Limited Share Price

For the financial year 2025, IndiGo reported total income of approximately INR 841 billion, an 18% increase from the previous year, marking its first revenue milestone of over USD 10 billion. Profit, excluding foreign exchange impacts, was INR 88.7 billion, while net profit stood at INR 72.6 billion. The fourth quarter alone saw net profit of INR 30.7 billion with a margin of 13.8%, reflecting robust demand, particularly during festive seasons.

Looking ahead, IndiGo has projected an early double-digit growth in capacity for financial year 2026 and expects mid-teens capacity growth for Q1 FY2026. Management highlighted that the base for their international capacity share is currently at approximately 30% of total ASKs, targeting an increase to over 40% by FY2030. The company recently added seven new international destinations, expanding its global footprint.

IndiGo has also begun damp leasing six B787 aircraft from Norse Atlantic Airways, commencing operations on routes to Bangkok, Amsterdam, and Manchester in July 2025. The focus on international markets is considered crucial, given the low market share of Indian airlines in long-haul operations.

The company aims to enhance its customer engagement through its newly launched loyalty program, BluChip, which has already attracted around 2.9 million sign-ups. Management emphasized the importance of maximizing ancillary revenue through both cargo and upgraded service offerings like in-flight meals on long-haul flights.

Lastly, the airline's strong financial position has been recognized with an investment-grade rating from Moody's, underscoring its robust liquidity and capital structure. Plans for re-investments in fleet growth, digital initiatives, and shareholder returns were also communicated, including a proposed dividend of INR 10 per share, reflecting confidence in long-term sustainability and profitability.

Q1: What comments can you provide on the trends in yields and cancellations?
Gaurav Negi: April was a very strong month, with both passenger growth and yields holding up. However, following recent geopolitical events, we experienced a notable uptick in cancellations and a dip in booking trends. Fortunately, recent days indicate stabilization and an uptick in bookings. We remain optimistic about recovery in June, especially given it is a holiday period in India.

Q2: What challenges do you anticipate with IndiGo's long-haul ventures?
Pieter Elbers: IndiGo aims to maintain a low-cost basis while ensuring high-quality service. While catering to European markets, we will adjust our product, offering meals across flights to Amsterdam and Manchester. However, this will not change our domestic service standards, and we are confident in our position to become a global aviation player.

Q3: Can you provide insights on the impact of the Pakistan airspace closure?
Pieter Elbers: The closure affects only 2 of our 131 destinations, specifically Almaty and Tashkent. Overall, while around 30 flights are impacted, this accounts for a small percentage of our daily operations. With 2,200 flights, the financial impact is limited and manageable.

Q4: How does codeshare revenue contribute to your overall earnings?
Pieter Elbers: We have two types of codeshare agreements"”one with foreign operators where they use our domestic flights, and others where we connect on international flights. Although still in single digits, codeshare revenue has grown and significantly supports our earnings.

Q5: Could you comment on your business class performance and traffic on new routes?
Pieter Elbers: Our Stretch service is gradually being implemented. Currently operating on five routes with 16 aircraft, we expect to see increasing load factors as more aircraft come online. Established routes like Mumbai-Delhi show solid performance, while newer routes may need more time to mature.

Q6: How do you foresee cost escalations impacting the FY'26?
Gaurav Negi: We anticipate natural escalation in maintenance and airport charges, but we aim to keep overall costs flat for FY'26, as we've already addressed some pressures via the return of damp-leased aircraft and scaling down damp leases alleviating costs.

Q7: What are your international targets regarding growth capacity and ASK share?
Pieter Elbers: We aim for about 40% of our ASKs to be international. While we won't specify a market share target, we recognize that Indian operators currently have a smaller share in long-haul markets, representing a significant growth opportunity.

Q8: Can you elaborate on your capital allocation plans?
Gaurav Negi: Our capital allocation strategy involves maintaining a safety net of around 20-25% of our top line. A significant focus will be on digital investments, acquiring assets incrementally, and returning value to shareholders through dividends"”reflecting our commitment to prudent financial management.

Q9: How are you preparing for potential challenges in international operations?
Pieter Elbers: We maintain contingency plans to adjust our network as needed. Our partnerships and codeshare agreements provide alternatives and mitigate risks. We focus on providing access to valuable international markets, ensuring ongoing connectivity for our customers.

Q10: What strategies are in place to increase ancillary revenue?
Pieter Elbers: We see significant potential in cargo opportunities, particularly with wider bodies flying international routes. Additionally, our decision to provide meals onboard aligns with enhancing the overall customer experience, making these operations more viable and potentially boosting ancillary revenues.

These questions and answers encapsulate the major inquiries from the Q&A session of the earnings call, emphasizing key financial metrics, strategies, and operational insights.