IndiGo Q4 Profit Soars 62%; PL Capital Reiterates ‘Buy’ with ₹6,084 Target on Yield, International Growth Tailwinds
- 28th May 2025
- 03:30:00 PM
- 4 min read
Mumbai | May 28, 2025 – InterGlobe Aviation Ltd (IndiGo) reported a standout Q4FY25 performance, with net profit rising 61.9% YoY to ₹30,675 crore, led by firm yields, benign fuel prices, and operational scale. The results exceeded expectations across most parameters, prompting Prabhudas Lilladher (PL) to maintain its ‘Buy’ rating on the stock, while raising the target price to ₹6,084.
The airline’s revenue for the quarter grew 24.3% YoY to ₹2,21,519 crore, supported by a 25.4% jump in passenger revenue and strong traction in ancillary income. EBITDAR for the quarter surged nearly 59% YoY to ₹69,535 crore, with margins expanding to 30.8% — a notable beat versus PL’s estimate of 28.5%.
Buoyed by the performance, IndiGo’s board declared a ₹10 per share dividend, marking the first payout in five years.
Key Operating Highlights
Yields improved 2.2% YoY to ₹5.32 per km, aided by peak-season travel, while fuel CASK declined to ₹1.60, down 6.6% YoY, on the back of stable aviation turbine fuel prices. The airline maintained a load factor of 87.4%, and available seat kilometre (ASKM) growth of 21% YoY indicates strong underlying demand.
|
Q4FY25 Key Metrics |
Value |
YoY Change |
|
Revenue |
₹2,21,519 crore |
24.30% |
|
Net Profit |
₹30,675 crore |
61.90% |
|
EBITDAR Margin |
30.80% |
+560 bps |
|
Yield |
₹5.32/km |
2.20% |
|
Fuel CASK |
₹ 1.60 |
-6.60% |
|
Fleet Size |
434 aircraft |
18.30% |
International Strategy and Fleet Optimisation
IndiGo has taken early steps towards premiumisation with its launch of ‘IndiGo Stretch’ seating, offering extra legroom. Currently operational on 5 routes using 16 aircraft, the airline plans to roll this out to 40 aircraft, tapping into higher-yield segments.
Fleet strength stood at 434 aircraft, with 67 new additions in FY25. The Aircraft on Ground (AoG) count has started tapering, further supporting capacity growth and efficiency. The company also added two owned ATRs during the quarter, enhancing its regional play.
5 Key Takeaways from Management Commentary
- ASKM growth is expected in mid-teens in Q1FY26, underpinned by improved aircraft availability and route expansion.
- The international ASKM mix is targeted to reach 40% by FY30, up from 30% currently, with ongoing fleet induction and new destination launches.
- Damp lease agreements have been signed for six aircraft from Norse Atlantic, with five more likely in 2HFY26 to support overseas expansion.
- The airline is steadily expanding its premium offering, with the rollout of IndiGo Stretch aimed at boosting per-passenger revenue.
- Despite airspace disruptions over Pakistan, the operational impact remains limited, affecting only 19 routes and 34 flights out of 2,200 daily.
Valuation Outlook and Risks
PL has revised its FY26 and FY27 profit estimates for IndiGo to ₹9,222 crore and ₹9,704 crore, respectively, reflecting upgrades of 13% and 10%. Revenue is projected to grow to over ₹8.85 lakh crore in FY26, on the back of robust demand and disciplined cost control.
“We fine-tune our yield and fuel CASK assumptions, which drives an upward revision in PAT estimates,” the report states.
The brokerage values the stock at 11x Sep-26E EBITDAR, leading to a revised target price of ₹6,084, and retains a ‘Buy’ rating. “We expect sales/EBITDAR CAGR of 15%/12% over FY25–FY27E,” PL added, signalling strong earnings visibility.
Management commentary suggests a stable fare environment ahead, with yields likely to hold around ₹5.1/km, aided by industry consolidation and steady travel demand. However, PL flagged that “excess FX and ATF volatility is a key risk” to their bullish thesis.
Bottom Line
IndiGo continues to consolidate its lead in Indian aviation through a twin-engine strategy: tapping premium travellers with smarter cabin options and aggressively expanding into global skies. With operational efficiency improving and cost levers in play, the airline appears structurally poised for sustained profitability. For investors, the flight path ahead looks steady — with PL’s bullish stance backed by fundamentals and scale.
PL Capital Desk
Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. It is based on several secondary sources on the internet and is subject to changes. Please consult an expert before making related decisions.
