On Friday, the share price of InterGlobe Aviation, the parent organization of IndiGo was flying high by almost 3% in the early trading session after announcing record fiscal numbers for FY24.
IndiGo’s Q4 results
India’s largest airline operation on Thursday, reported above-estimate earnings for the quarter that ended March 2024, a 106% year-on-year increase in net profit, totaling Rs1,894 crores for the fourth quarter, compared to Rs 919 crore in the same quarter last year.
IndiGo’s revenue from operations climbed 26 percent year-on-year to Rs 17,825.30 crore in Q4 FY24.
The aviation company also reports a consolidated total income of ₹71,231.16 crore, up 27.5% year-on-year (YoY), and record net profit of ₹8,172.46 crore during the fiscal, against a net loss of ₹305.78 crore a year earlier.
While, carrier’s EBITDAR (earnings before interest, tax, depreciation, amortization, and rent) grew 140% year-on-year (YoY) to Rs 4,412.3 crore as against Rs 2,966.5 crore a year back, while its margin increased to 24.8 percent from 20.9 percent. 
Further, the IndiGo’s cash reserves, including free and restricted cash, have increased ₹34,737 crore at the end of March 2024, an increase of 48.3% over the corresponding year when it was ₹23,424 crore.
In a conference call after the announcement of results IndiGo CEO Pieter Elbers said, “We believe, as India gears up to become the third largest economy in the world, it’s our privilege to provide New India even more options to choose from as they travel business. We are excited with this new phase and tailor-made product in IndiGo’s evolution and strategy and aim to further give wings to the nation, by connecting people and aspirations.”
Fluctuations in share price
Driven by a 24.7% year-on-year (YoY) surge in its traffic in FY24 to 106.7 million, IndiGo’s market share rose from 56.8% in March 2023 to 60.5% in March 2024. 
On Thursday, InterGlobe shares closed almost 1% up on the BSE at ₹4,400.55. However, on Friday, the price dropped by −125.50 (2.85%) at Rs 4,275.00.
Factors for growth
This significant growth stemmed from robust demand for air travel, substantial capacity additions, low jet fuel costs, and higher yields.
Importantly, IndiGo is set to change over the next few years, with loyalty programmes, a ‘tailor-made business product’—or premium class for its busiest route (Delhi-Mumbai probably), and long-haul international planned. Details of its business class are expected to be unveiled in August, coinciding with the airlines’ 18th anniversary.
Estimates by brokerages
Morgan Stanley has raised the target price on IndiGo shares to ₹5,142, implying it sees a potential upside of more than 16% from the closing price of May 23. It noted that the firm’s earnings before interest, taxes, depreciation, and EBITDA in the fourth quarter was 10% ahead of its estimate and expects inflationary pressure to rise. Morgan Stanley stated that the factors backing such estimates are change may involve near-term cost pressures but the company has the right strategy, as the consumer is also evolving.
Nuvama’s latest report on InterGlobe Aviation (IndiGo) suggests a positive outlook maintaining a “Buy” rating while increasing the target price to Rs 5,192 from Rs 4,288 previously. “IndiGo has been delivering best-in-class performance, thereby gaining market share. Despite being largely domestic-focused, IndiGo has among the best aircraft utilization levels,” it said.
