On Wednesday, India’s largest airline reports its first loss since IPO. India’s airline suffered a heavy loss because of high fuel prices and the weak rupee. It reports its first quarterly loss of Rs 652.1 crore for July-September 2018 since its listing three years ago. Revenue rose 17% to Rs 61.85 billion from a year earlier.

On BSE, on Wednesday the airline’s scrip closed at Rs. 817 up 0.8%. Indigo’s profit of Rs. 811 crore in April-June 2017 was the highest ever quarterly profit for an Indian airline ever.

According to the analysts, there may be a mismatch between demand and supply in the market and airlines need to rationalize addition of planes, Indigo management instead increases capacity additional plan and blamed rival airlines for discounting.

Indigo’s expense for the jet fuel which is close to all-time high prices in India. Recently it rose to Rs 3035.5 crore in Q2, and up by 84% from Rs 1647.3 % in the same quarter the previous year. Foreign exchange loss rose to Rs 335.4 crore, up 628.4% from Rs 46 crore in last July-September quarter. As a result, airline’s total cost ballooned to Rs 7502.3 crore, a 58.2% increase from, Rs 4741 crore. On another side, total income increased by 18.3% to Rs 6154.2 crore from Rs 5,505.6 crore in Q2 of last fiscal year.

The management in its justification said that the company’s lowest cost structure allows it to fly more seats despite the high cost of operation.

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