08 June 2021 Results Review 4QFY21
InterGlobe Aviation
Recovery priced in REDUCE
Indigo’s 4QFY21 results were below estimates as the airline reported a loss of CMP (as on 07 Jun 2021) INR 1,755
INR 11.6bn. The pick-up in aviation traffic is now delayed to 2HFY22 at a time
Target Price INR 1,580
when crude prices are firming up. We believe that the expected recovery in the
industry prospects is adequately factored in at current levels (the stock has risen NIFTY 15,752
over 80% from its COVID lows). We downgrade the stock to REDUCE and
KEY
lower our EBITDAR estimates by ~10% over FY22/23E. We set a revised target OLD NEW
CHANGES
price of INR 1,580, based on 7X EV/EBITDAR FY23E.
Rating ADD REDUCE
4QFY21 financials: Revenue at INR 62.2bn grew 27% QoQ, which was lower
Price Target INR 1,600 INR 1,580
than expected as travel growth was restricted due to state-wise lockdowns.
PAX yields came in at INR 3.7 (-1% QoQ). However, ancillary revenue grew FY21E FY22E
EPS %
to 20% of sales vs 14/17% YoY/QoQ due to increased cargo loads. Fuel cost NA -10%
was significantly higher at 31% of sales vs 23% QoQ (the average fuel cost is
up 26% QoQ); forex loss came in at INR 1.17bn. Consequently, IndiGo KEY STOCK DATA
reported an EBITDAR of INR 6.15bn (vs. INR 9.03bn QoQ) and a net loss of
Bloomberg code INDIGO IN
INR 11.6bn (vs loss of INR 8.7/6.3 YoY/QoQ).
No. of Shares (mn) 385
Fundraise on the cards again: Earlier, the company had called off its decision
to raise funds. However, led by the increasing daily cash burn (INR 190mn in MCap (INR bn) / ($ mn) 676/9,080
4QFY21 vs INR 150mn QoQ) and to strengthen the balance sheet, the board 6m avg traded value (INR mn) 2,065
has decided to raise INR 30bn via a QIP. IndiGo had free cash of INR 71bn at 52 Week high / low INR 1,851/873
the end of FY21 (total cash at INR 186bn) while its debt has risen to INR 298bn
(including lease liability).
STOCK PERFORMANCE (%)
Key highlights: (1) Daily cash burn rate remains elevated: The daily cash 3M 6M 12M
burn at Indigo was INR 190mn in 4QFY21 vs INR 150mn QoQ. Management
Absolute (%) 0.8 0.9 47.5
expects this to remain elevated in the near term. (2) Fuel prices: As the crude
oil price has risen; it has increased costs by 26% QoQ. The supplementary Relative (%) (3.0) (14.3) (5.1)
rentals were elevated in 4QFY21 as more planes were at the MRO facilities.
This should moderate, going ahead. (3) Travel trends to pick up: IndiGo had SHAREHOLDING PATTERN (%)
reached a load factor of 85% of the pre-COVID level in Feb-21 as pent-up Dec-20 Mar-21
demand was witnessed prior to the second wave. It expects travel to revive as
Promoters 74.9 74.8
the COVID cases subside. International operations remain weak at 30% of pre-
COVID levels. (4) NEOs have improved cost economics: A320/321 NEOs FIs & Local MFs 5.6 4.8
now account for 56% of the fleet. Their unit costs are 10% lower than that of FPIs 17.3 18.3
CEOs. As the older CEO planes are phased out, the airline will save on
Public & Others 2.2 2.0
supplementary rentals. (5) Fleet size: The fleet is expected to remain at the
current level (of ~285 planes) over FY22, with the airline phasing out more of Pledged Shares 0.0 0.0
its CEO planes over the next year even as it takes deliveries of the new aircraft. Source : BSE
It has ~100 CEO planes in operations currently.
Financial Summary (Standalone)
YE Mar 4Q 4Q YoY 3Q QoQ
FY19 FY20 FY21 FY22E FY23E
(INR mn) FY21 FY20 (%) FY21 (%)
Net Sales 62,229 82,990 (25.0) 49,100 26.7 284,968 353,869 146,406 210,330 343,417
Aditya Makharia
EBITDAR 6,156 (127) NA 9,030 (31.8) 47,940 41,657 2,550 38,177 85,749
+91-22-6171-7316
APAT (11,590) (8,735) NA (6,266) NA 1,562 (6,173) (58,298) (20,072) 26,411
AEPS (Rs) (30.1) (22.7) NA (16.3) NA 4.1 (16.0) (151.5) (52.2) 68.6
P/E (x) NA NA NA NA 25.5
Mansi Lall
EV/
EBITDAR
18.7 17.5 NA 19.5 7.8
Source: Company, HSIE Research +91-22-6171-7357
HSIE Research is also available on Bloomberg ERH HDF <GO> & Thomson Reuters
, InterGlobe Aviation: Results Review 4QFY21
Quarterly Financial Snapshot
Particulars (INR mn) 4QFY21 4QFY20 % YoY 3QFY21 % QoQ
Net Sales 62,229 82,990 (25.0) 49,100 26.7
QoQ growth in revenues Fuel cost 19,145 28,604 (33.1) 11,429 67.5
Supplementary rentals 14,575 16,808 (13.3) 11,523 26.5
was driven by higher
Airport fees & charges 6,430 7,234 (11.1) 5,357 20.0
ancillary income, (up 10%
Other input costs 295 508 (41.9) 180 63.8
QoQ) as the airline Employee cost 7,352 10,509 (30.0) 7,359 (0.1)
converted 10 planes to Forex gain/(loss) 1,171 10,142 (88.5) (2,023) (157.9)
freighters Other expenses 7,106 9,313 (23.7) 6,244 13.8
Total expenses 56,073 83,117 (32.5) 40,070 39.9
EBITDAR 6,156 (127) NA 9,030 (31.8)
Aircraft and engine rentals 662 1,226 (46.0) 642 3.0
Fuel cost grew EBITDA 5,495 (1,353) NA 8,388 (34.5)
significantly over the Depreciation 13,195 10,063 31.1 11,565 14.1
EBIT (7,700) (11,416) NA (3,177) NA
quarter. Average fuel cost
Other income 1,392 3,359 (58.6) 2,326 (40.2)
grew 26% QoQ Interest 5,282 4,877 8.3 5,415 (2.4)
PBT (11,590) (12,935) NA (6,266) NA
Tax expense - (4,200) NA - NA
PAT (11,590) (8,735) NA (6,266) NA
Employee cost has come
EPS (30.1) (22.7) NA (16.3) NA
down sharply driven by Source: Company, HSIE Research
staff rationalisation and
salary cuts Quarterly Performance Analysis
As % of sales 4QFY21 4QFY20 YoY (bps) 3QFY21 QoQ (bps)
Fuel cost 30.8 34.5 (370) 23.3 749
Supplementary rentals 23.4 20.3 317 23.5 (5)
The supplementary rentals Airport fees & charges 10.3 8.7 162 10.9 (58)
Other input costs 0.5 0.6 (14) 0.4 11
were elevated at INR
Employee cost 11.8 12.7 (85) 15.0 (317)
14.57bn and are likely to
Forex gain/(loss) 1.9 12.2 (1,034) (4.1) NA
moderate from hereon Other expenses 11.4 11.2 20 12.7 (130)
Total expenses 90.1 100.2 (1,005) 81.6 850
EBITDAR Margin 9.9 (0.2) NA 18.4 (850)
Aircraft and engine rentals 1.1 1.5 (41) 1.3 (24)
EBITDA Margin 8.8 (1.6) NA 17.1 (825)
Tax Rate - 32.5 NA - -
PAT Margin (18.6) (10.5) NA (12.8) NA
Source: Company, HSIE Research
Page | 2
InterGlobe Aviation
Recovery priced in REDUCE
Indigo’s 4QFY21 results were below estimates as the airline reported a loss of CMP (as on 07 Jun 2021) INR 1,755
INR 11.6bn. The pick-up in aviation traffic is now delayed to 2HFY22 at a time
Target Price INR 1,580
when crude prices are firming up. We believe that the expected recovery in the
industry prospects is adequately factored in at current levels (the stock has risen NIFTY 15,752
over 80% from its COVID lows). We downgrade the stock to REDUCE and
KEY
lower our EBITDAR estimates by ~10% over FY22/23E. We set a revised target OLD NEW
CHANGES
price of INR 1,580, based on 7X EV/EBITDAR FY23E.
Rating ADD REDUCE
4QFY21 financials: Revenue at INR 62.2bn grew 27% QoQ, which was lower
Price Target INR 1,600 INR 1,580
than expected as travel growth was restricted due to state-wise lockdowns.
PAX yields came in at INR 3.7 (-1% QoQ). However, ancillary revenue grew FY21E FY22E
EPS %
to 20% of sales vs 14/17% YoY/QoQ due to increased cargo loads. Fuel cost NA -10%
was significantly higher at 31% of sales vs 23% QoQ (the average fuel cost is
up 26% QoQ); forex loss came in at INR 1.17bn. Consequently, IndiGo KEY STOCK DATA
reported an EBITDAR of INR 6.15bn (vs. INR 9.03bn QoQ) and a net loss of
Bloomberg code INDIGO IN
INR 11.6bn (vs loss of INR 8.7/6.3 YoY/QoQ).
No. of Shares (mn) 385
Fundraise on the cards again: Earlier, the company had called off its decision
to raise funds. However, led by the increasing daily cash burn (INR 190mn in MCap (INR bn) / ($ mn) 676/9,080
4QFY21 vs INR 150mn QoQ) and to strengthen the balance sheet, the board 6m avg traded value (INR mn) 2,065
has decided to raise INR 30bn via a QIP. IndiGo had free cash of INR 71bn at 52 Week high / low INR 1,851/873
the end of FY21 (total cash at INR 186bn) while its debt has risen to INR 298bn
(including lease liability).
STOCK PERFORMANCE (%)
Key highlights: (1) Daily cash burn rate remains elevated: The daily cash 3M 6M 12M
burn at Indigo was INR 190mn in 4QFY21 vs INR 150mn QoQ. Management
Absolute (%) 0.8 0.9 47.5
expects this to remain elevated in the near term. (2) Fuel prices: As the crude
oil price has risen; it has increased costs by 26% QoQ. The supplementary Relative (%) (3.0) (14.3) (5.1)
rentals were elevated in 4QFY21 as more planes were at the MRO facilities.
This should moderate, going ahead. (3) Travel trends to pick up: IndiGo had SHAREHOLDING PATTERN (%)
reached a load factor of 85% of the pre-COVID level in Feb-21 as pent-up Dec-20 Mar-21
demand was witnessed prior to the second wave. It expects travel to revive as
Promoters 74.9 74.8
the COVID cases subside. International operations remain weak at 30% of pre-
COVID levels. (4) NEOs have improved cost economics: A320/321 NEOs FIs & Local MFs 5.6 4.8
now account for 56% of the fleet. Their unit costs are 10% lower than that of FPIs 17.3 18.3
CEOs. As the older CEO planes are phased out, the airline will save on
Public & Others 2.2 2.0
supplementary rentals. (5) Fleet size: The fleet is expected to remain at the
current level (of ~285 planes) over FY22, with the airline phasing out more of Pledged Shares 0.0 0.0
its CEO planes over the next year even as it takes deliveries of the new aircraft. Source : BSE
It has ~100 CEO planes in operations currently.
Financial Summary (Standalone)
YE Mar 4Q 4Q YoY 3Q QoQ
FY19 FY20 FY21 FY22E FY23E
(INR mn) FY21 FY20 (%) FY21 (%)
Net Sales 62,229 82,990 (25.0) 49,100 26.7 284,968 353,869 146,406 210,330 343,417
Aditya Makharia
EBITDAR 6,156 (127) NA 9,030 (31.8) 47,940 41,657 2,550 38,177 85,749
+91-22-6171-7316
APAT (11,590) (8,735) NA (6,266) NA 1,562 (6,173) (58,298) (20,072) 26,411
AEPS (Rs) (30.1) (22.7) NA (16.3) NA 4.1 (16.0) (151.5) (52.2) 68.6
P/E (x) NA NA NA NA 25.5
Mansi Lall
EV/
EBITDAR
18.7 17.5 NA 19.5 7.8
Source: Company, HSIE Research +91-22-6171-7357
HSIE Research is also available on Bloomberg ERH HDF <GO> & Thomson Reuters
, InterGlobe Aviation: Results Review 4QFY21
Quarterly Financial Snapshot
Particulars (INR mn) 4QFY21 4QFY20 % YoY 3QFY21 % QoQ
Net Sales 62,229 82,990 (25.0) 49,100 26.7
QoQ growth in revenues Fuel cost 19,145 28,604 (33.1) 11,429 67.5
Supplementary rentals 14,575 16,808 (13.3) 11,523 26.5
was driven by higher
Airport fees & charges 6,430 7,234 (11.1) 5,357 20.0
ancillary income, (up 10%
Other input costs 295 508 (41.9) 180 63.8
QoQ) as the airline Employee cost 7,352 10,509 (30.0) 7,359 (0.1)
converted 10 planes to Forex gain/(loss) 1,171 10,142 (88.5) (2,023) (157.9)
freighters Other expenses 7,106 9,313 (23.7) 6,244 13.8
Total expenses 56,073 83,117 (32.5) 40,070 39.9
EBITDAR 6,156 (127) NA 9,030 (31.8)
Aircraft and engine rentals 662 1,226 (46.0) 642 3.0
Fuel cost grew EBITDA 5,495 (1,353) NA 8,388 (34.5)
significantly over the Depreciation 13,195 10,063 31.1 11,565 14.1
EBIT (7,700) (11,416) NA (3,177) NA
quarter. Average fuel cost
Other income 1,392 3,359 (58.6) 2,326 (40.2)
grew 26% QoQ Interest 5,282 4,877 8.3 5,415 (2.4)
PBT (11,590) (12,935) NA (6,266) NA
Tax expense - (4,200) NA - NA
PAT (11,590) (8,735) NA (6,266) NA
Employee cost has come
EPS (30.1) (22.7) NA (16.3) NA
down sharply driven by Source: Company, HSIE Research
staff rationalisation and
salary cuts Quarterly Performance Analysis
As % of sales 4QFY21 4QFY20 YoY (bps) 3QFY21 QoQ (bps)
Fuel cost 30.8 34.5 (370) 23.3 749
Supplementary rentals 23.4 20.3 317 23.5 (5)
The supplementary rentals Airport fees & charges 10.3 8.7 162 10.9 (58)
Other input costs 0.5 0.6 (14) 0.4 11
were elevated at INR
Employee cost 11.8 12.7 (85) 15.0 (317)
14.57bn and are likely to
Forex gain/(loss) 1.9 12.2 (1,034) (4.1) NA
moderate from hereon Other expenses 11.4 11.2 20 12.7 (130)
Total expenses 90.1 100.2 (1,005) 81.6 850
EBITDAR Margin 9.9 (0.2) NA 18.4 (850)
Aircraft and engine rentals 1.1 1.5 (41) 1.3 (24)
EBITDA Margin 8.8 (1.6) NA 17.1 (825)
Tax Rate - 32.5 NA - -
PAT Margin (18.6) (10.5) NA (12.8) NA
Source: Company, HSIE Research
Page | 2
