InterGlobe Aviation (INDIGO IN) – Q3FY26 Result Update – A quarter marred by one-offs – HOLD
Published on 23 Jan 2026
Despite operational disruptions in Dec-25, INDIGO IN reported commendable performance with FX adjusted EBITDAR margin of 29.4% (PLe 25.9%) led by lower-than-expected employee and fuel cost per ASKM. However, PAT was marred by FX loss of Rs11.1bn along with a provision of Rs15.4bn pertaining to social security benefits and compensation led outgo arising from operational disruptions. Though performance in 3QFY26 was noteworthy; we broadly maintain our FY27E/FY28E EBITDAR estimates as complying with Flight Duty Time Limitation (FDTL) laws may not only result in employee cost inflation but can also hinder ASKM growth, if requisite hiring to meet the new norms does not materialize. We expect ASKM CAGR of 10% over FY25-FY28E and foresee inflation seep into the cost structure amid unfavorable FX movement and rise in damp leases. We expect sales/EBITDAR CAGR of 10%/7% over FY25-FY28E and retain HOLD on the stock with TP of Rs5,186 (10.5x FY27E EBITDAR; no change in target multiple).
