HDFC Securities is bullish on Interglobe Aviation has recommended buy rating on the stock with a target price of Rs 1280 in its research report dated January 24, 2019.
HDFC Securities' research report on Interglobe Aviation
Driven by a 27.8% YoY increase in RPKMs and a 4.5% YoY increase in yields, INDIGO reported a 28.1% YoY increase in 3QFY19 revenue to Rs 79.2bn (+7.2% vs. expectations, driving the beat). Despite revenue growth INDIGO’s adj. EBITDAR plummeted 17.6% YoY to Rs 16.0bn as unit fuel costs remained elevated at Rs 1.58 (+27.3%/1.4% YoY/QoQ), while unit non-fuel costs at Rs 2.14 increased 3.6%/-6.5% YoY/QoQ. RPAT at Rs 1.9bn came in much ahead of our estimate of a loss of Rs 2.5bn.
Outlook
We maintain BUY with a TP of Rs 1,280 (+15.6%) based on 8.0x Dec 20E EV/EBITDAR.
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