InterGlobe Aviation (INDIGO IN) – Q4FY26 Result Update – ME crisis & FX volatility dents profit – HOLD
Published on 30 May 2026
We cut our EBITDAR estimates by 10%/7% for FY27E/FY28E as we trim our ASKM growth assumptions by ~5% and fine tune our FX and brent crude forecasts over the next 2 years. INDIGO IN’s 4QFY26 performance was charred by ME crisis (~18% of the capacity under duress) and excessive currency volatility resulting in net FX loss of INR42.1bn. While the situation is improving with 2/3rd of the capacity being restored and normalization expected by June-26, surge in brent crude and sharp depreciation in Rupee is likely to put margins under pressure. We expect INR to be at 95/96 per USD and fuel cost to be at INR1.86/INR1.64 per ASKM resulting in EBITDAR margin of 22.6%/24.0% in FY27E/FY28E respectively. Further, ASKM growth guidance of 3-4% for 1QFY27E indicates signs of near-term demand weakness. We are factoring 5% ASKM CAGR over 2 years and believe sharp repricing via yield management (PRASK to grow by mid-teens in 1QFY27E) can have a dampening impact on demand. Given multiple headwinds arising from capacity bottlenecks, FX volatility and rising crude prices, we maintain HOLD on the stock with a TP of INR4,724 (9x FY28E EBITDAR; earlier 10.5x as we roll forward to FY28E).
