IndiGo Shares Rise Over 3% Despite Widened Q2 Net Loss, Brokerages Maintain Positive Outlook

InterGlobe Aviation, the parent company of IndiGo, saw its share price climb over 3% on the BSE on Thursday, reaching ₹5,830. This surge occurred despite the airline reporting a net loss of ₹2,582.1 crore for the September quarter (Q2FY26), which was significantly wider than the ₹753.9 crore loss in the same quarter last year.

Key financial highlights include a reported net loss of ₹2,582.1 crore, compared to ₹753.9 crore YoY. However, excluding the impact of currency depreciation (forex hit), IndiGo posted a net profit of ₹103.9 crore. Total revenue from operations increased by 10% year-on-year to ₹19,599.5 crore. Ebitdar (Earnings Before Interest, Taxes, Depreciation, Amortisation, and Rent), a measure of operational profitability, stood at ₹1,114.3 crore (6% margin) including the forex hit, down from ₹2,434 crore (14.3% margin) last year. Excluding the forex impact, Ebitdar surged to ₹3,800.3 crore with a 20.5% margin, up from ₹2,666.8 crore (15.7% margin) YoY.

Operational metrics showed capacity growth of 7.8%, passenger numbers up 3.6%, and yields increasing by 3.2%, while the Passenger Load Factor (PLF) remained steady at 82.5%.

Brokerage Views: Most brokerages reiterated their positive stance. Elara Capital maintained a 'Buy' rating, raising its price target to ₹7,241, citing improved operating earnings and raising FY26-28 EPS estimates. Motilal Oswal Financial Services kept its 'Buy' rating and target price of ₹7,300, highlighting IndiGo's international expansion strategy to mitigate forex risks, despite cutting FY26 earnings estimates due to forex losses. Emkay Global Financial Services also maintained a 'Buy' with a raised target of ₹6,800, noting IndiGo's market share gains and operational resilience, while adjusting EPS estimates downwards to account for higher costs.

Definitions: - Net Loss: When a company's expenses exceed its revenues, resulting in a financial deficit. - Forex Hit/Forex Depreciation: The negative impact on a company's financials due to a decline in the value of its domestic currency against foreign currencies, increasing costs of foreign-denominated liabilities or expenses. - Ebitdar: Earnings Before Interest, Taxes, Depreciation, Amortisation, and Rent. It represents operating profit before accounting for financing costs, taxes, and non-cash expenses like depreciation and amortisation, and lease rentals. - CASK (Cost per Available Seat Kilometer): The cost incurred by an airline to fly one seat for one kilometre. - RASK (Revenue per Available Seat Kilometer): The revenue generated by an airline for flying one seat for one kilometre. - PLF (Passenger Load Factor): The percentage of seats filled by passengers on a flight. - Yield: The average revenue earned per passenger per kilometre. - AOGs (Aircraft on Ground): The number of aircraft temporarily unavailable for flight operations due to maintenance or repairs. - Damp Leases: Short-term aircraft leases where the lessee (the airline) is responsible for most operational costs, including maintenance.

Impact: This news is highly relevant for the Indian stock market, specifically the aviation sector. The divergence between the net loss and stock price movement highlights investor focus on operational performance and future growth potential over short-term forex-driven losses. Rating: 9/10