Add InterGlobe Aviation, target price Rs 1400: ICICI Securities

ICICI Securities has given an add rating to InterGlobe Aviation with a target price of Rs 1400. The share price moved down by 1.35 per cent from its previous close of Rs 1331.20. The stock’s last traded price is Rs 1313.20.

InterGlobe Aviation Ltd., incorporated in the year 2004, is a Large Cap company (having a market cap of Rs 51139.43 Crore) operating in Airlines sector.

Financials
For the quarter ended 30-09-2020, the company reported a Consolidated sales of Rs 2740.96 Crore, up 257.48 % from last quarter Sales of Rs 766.74 Crore and down -66.18 % from last year same quarter Sales of Rs 8105.19 Crore. Company reported net profit after tax of Rs -1194.83 Crore in latest quarter.

Investment Rationale
InterGlobe Aviation (IndiGo) will remain one of the biggest beneficiaries of expected recovery from Covid with healthy signs of return of air traffic, steady PLFs complemented by strong balance sheet. The pace of cash erosion has slowed down with the liquidity measures taken by the company has added to the business strength. However, expected delay in return of corporate traffic could lead to lower fares, which will put pressure on earnings in FY21. Post the 40% rally in stock price over the past three months, the brokerage downgrades the stock from Buy to ADD.

Promoter/FII Holdings
Promoters held 74.9 per cent stake in the company as of Sept 30, 2020, while FIIs held 14.9 per cent, DIIs 7.9 per cent and public and others 2.3 per cent.