Shares of InterGlobe Aviation, operator of IndiGo airline, locked ta 10 percent upper circuit on June 3 despite the company reporting a net loss in the quarter ended March 2020.
The company has posted a net loss at Rs 870.8 crore for the quarter ended March 2020, partly affected by the shutdown of operations due to the coronavirus-led lockdown.
The company had a profit of Rs 595.8 crore in the same period last year.
Revenue from operations during the quarter grew 5.3 percent year-on-year (YoY) to Rs 8,299.1 crore.
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Morgan Stanley | Rating: Overweight | Target: Rs 1,701
According to Morgan Stanley, the passenger traffic will be slow to recover. The cost structure and competitive position will improve in the downturn, reported CNBC-TV18.
However, the valuation in the context of earnings potential is looking attractive. The company is shifting focus from growth to conserving cash and cost management.
Credit Suisse | Rating: Outperform | Target: Cut to Rs 1,300 from Rs 1,500
The results beat our estimates on stronger-than-expected yields and revise FY21/22 earnings lower by 56/33% on a slower ramp up, said Credit Suisse.
It has maintained outperform on likely resumption of profitability by FY22. The company has a strong balance sheet that ensures survival while peers struggle, reported CNBC-TV18.
Prabhudas Lilladher | Rating: Accumulate | Target: Rs 995
Broking house cut company’s FY21/FY22 EBITDAR by 53.9% and 14% respectively given staggered removal of restrictions, gradual scale-up of operations and low consumer confidence.
It expects FY21 capacity to decline by 46% YoY while FY22 capacity is likely to be 90% of FY20 capacity.
Despite the near term challenges, IndiGo continues to remain better placed than its peers and is likely to emerge stronger from the current crisis.
At 09:20 hrs, Interglobe Aviation was quoting at Rs 977.00, up Rs 31.45, or 3.33 percent on the BSE.
There were pending buy orders of 17,765 shares, with no sellers available.
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