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Our Rating: OBSERVE & HOLD
Mehabe score: 2 G Factor: 2 Piotski Score: 3 The stock has a rating OBSERVE & HOLD. The mehabe team score is reflective of its fundamental and technical merits. A rating above 8 is considered good buy. The stock has a G-Factor of 2 and Piotski score of 3.
Description
Interglobe Aviation Ltd (Indigo) is India’s largest passenger airline operating as a low-cost carrier. Serving 86 destinations including 24 international destinations, it provides passengers with a simple, unbundled product, fulfilling its singular brand promise of providing “low fares, on-time flights, and a courteous and hassle-free service” to its customers. IndiGo commenced operations in August 2006 with a single aircraft and has grown its fleet to 262 aircrafts.
Main Points
Leadership in domestic segment
The company has a 54% market share in the domestic passenger traffic in India as per the latest records. # It also has a significant share of international market with ~12% per cent share of total international seat capacity to or from India. #Site:INDIGO
Market Cap:
Rs 67,531 cr
Price:
1754.0
Trading pe:
x
Book-value:
152/share
Div yield:
0.00 %
Earning yield:
-4.73%
Face-value:
10.0/share
52week high:
1831.15
52week low:
873.10
Technical Analysis
Stock trades at 1754.0, above its 50dma 1677.14. It also trades above its 200dma 1548.93. The stock remains bullish on techicals
The 52 week high is at 1831.15 and the 52week low is at 873.10
Price Chart
P/E Chart
Sales and Margin
Strengths
–
Weakness
– Stock is trading at 11.53 times its book value
– has low interest coverage ratio.
-The company has delivered a poor sales growth of -1.93% over past five years.
– has a low return on equity of -36.10% for last 3 years.
-Earnings include an other income of Rs.1036.33 Cr.
Competition
– The industry trades at a mean P/E of 4.3x. Interglobe Aviat trades at the industry’s max P/E of 8.44x. INDIGO trades at a P/E of x
– Industry’s mean G-Factor is 2.8 while the mean Piotski score is 7.0. INDIGO has a G-Factor of 2 and Piotski scoreof 3.
– Average 1 month return for industry is 15.0%. The max 1- month return was given by SpiceJet: a return of 27.32 %
Quarterly Results
Profit & Loss Statement
Profit&Loss Comments
Company reported sales of Rs 14641.0 cr for period ended Mar 2021 vis-vis sales of Rs 35756.0 cr for the period ended Mar 2020, a fall of 144.2%. The 3 year sales cagr stood at -14.0%.
Net Profit reported at Rs -5830.0 cr for period ended Mar 2021 vis-vis sales of Rs -248.0 cr for the period ended Mar 2020, falling 0%.
Balance Sheet Statement
Cash Flow Statement
Cash Flow comments
Sales Growth
Profit Growth Statement
Profit Growth Statement
Stock Price CAGR
Return of Equity
General Comments
– The company has worsened on its Return on Equity (RoE) metric. The RoE on Last Year basis was -100.0% compared to -36.0% over the last 3 Years. – The stock has given a return of 47% on a 1 Year basis vis-vis a return of 14% over the last 3 Years. – The compounded sales growth on a TTM bassis is -59% vis-vis a compounded sales growth of -14% over the last 3 Years. – The compounded profit growth on a TTM basis is -551% vis-vis a compounded profit growth of % over the last 3 Years.
Ratios
Shareholding Pattern
– FII shareholding has remained largely constant. The Mar 2021 fii holding stood at 18.34% vis-vis 17.34% for Dec 2020 – Public shareholding has remained largely constant. The Mar 2021 public holding stood at 2.02% vis-vis 2.23% for Dec 2020
Conclusion
– – Stock is trading at 11.53 times its book value
– has low interest coverage ratio.
-The company has delivered a poor sales growth of -1.93% over past five years.
– has a low return on equity of -36.10% for last 3 years.
-Earnings include an other income of Rs.1036.33 Cr.
Fundamentally, the stock remains weak on business fundamentals. Weak near term results have dampened and questioned business drivers. We suggest to wait for a upturn in business performance.
Technically, the stock trades above its 50 DMA 1677.14 and is trading at 1754.0 It has shown near term bullish momentum contrary to business fundamentals. We suggest to observe price action. However as investors, who like to avoid timing the markets, we suggest to avoid the stock
