Q4 Results Preview: Aviation sector to post weak quarter as airfares soar high
Q4 results preview: Retail sector demand remains muted, soft recovery await in value space; Trent, DMart likely outliers According to brokerage firm Elara Capital, InterGlobe Aviation (Indigo) and SpiceJet are likely to report a combined adjusted profit after tax (PAT) of ₹23.4 billion in Q4FY24 versus ₹33.2 billion in Q3FY24 and ₹6.2 billion in Q4FY23. The firm further highlighted that FY25 may witness muted demand growth in the first half (H1) due to grounding of 75 fleet for Indigo and pilot issues at Vistara.
However, it is expected that the domestic market will witness an oversupply in the second half (H2) of FY25 when INDIGO’s 75 grounded aircraft may fly again while the competitors may continue to add fleet around 10% of total domestic capacity. The brokerage firm expected the low-cost airline company to post an adjusted profit of ₹20.6 billion in Q4E versus ₹30.5 billion in Q3FY24 and ₹6.7 billion in Q4FY23.
“We expect passenger volume to improve 2% QoQ and 3% YoY with PLF at 87.2% in Q4FY24E versus 84.2% in Q4FY23," the firm said in a note. The brokerage firm maintained its ‘Reduce’ tag on Indigo, given the anticipated pause in market share growth and potential margin dip in H2FY25.
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