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Informist, Tuesday, May 26, 2026

By Anand JC

NEW DELHI – InterGlobe Aviation Ltd., which operates budget-carrier IndiGo, is expected to report a net loss for the March quarter and the slowest year-on-year rise in its revenue in the last 20 quarters as the industry reels under the ramifications of the ongoing war in West Asia. The aviation industry as a whole is expected to report a poor financial performance for the March quarter as a result of higher foreign exchange losses, increased fuel costs, and weak passenger volume due to the disruption caused by the war.

InterGlobe Aviation's profitability was under significant pressure throughout 2025-26 (Apr-Mar)--profit fell 21% on year in the June quarter, the company reported a loss of INR 26.14 billion in the September quarter, and profit fell 75% in the December quarter. Now, for the March quarter, it is expected to report a loss of INR 19.86 billion, according to the average of six estimates. The most optimistic expectation for InterGlobe Aviation's bottom line for the March quarter is a loss of INR 6.97 billion by Anand Rathi Share and Stock Brokers Ltd. and the highest loss estimate is INR 34.46 billion by Emkay Global Financial Services Ltd.

The company's revenue for the quarter under review is expected to grow only 2% on year and fall almost 4% on quarter to INR 225.69 billion, according to the average of six estimates. The highest estimate for InterGlobe Aviation's top line is INR 235.02 billion by Nuvama Wealth Management Ltd. and the lowest estimate is INR 222.71 billion by Anand Rathi.

The aviation behemoth holds a 63% market share in the domestic aviation market, despite the operational disruption in December, which prompted regulatory intervention. It operates a fleet of over 440 aircraft. In its analyst call for the December quarter financial results, the company had indicated that it would increase capacity by 10% on year during the March quarter. "This moderation in our capacity growth for the fourth quarter is primarily driven by adjustments related to reduced schedule to align with the regulatory requirements," the company's former chief executive officer Pieter Elbers had said. Elbers stepped down in April and the Director General of the International Air Transport Association, William Walsh, was named as his replacement. Walsh, also the former chief executive officer of British Airways, will join the firm in August.

"Near-term operational challenges due to rationalisation in the pilot roster and operational disruption in the Middle East (West Asia) may have near-term impact on capacity growth," Elara Securities said in a report.

OPERATIONAL BACKDROP

Even before the war in West Asia broke out on Feb. 28, the growth in the March quarter financials of aviation companies was expected to be weak year-on-year because of an unfavourable base. In January and February 2025, Uttar Pradesh had hosted the Hindu festival of Mahakumbh, which attracted massive crowds, buoying demand for flight tickets. "Domestic aviation traffic reported a modest growth of 4.4%/2.3% YoY in Jan-26/Feb-26, respectively. However, the traction in Mar-26 was impacted by geo-political headwinds especially on international routes," Prabhudas Lilladher said in a report.

The domestic aviation traffic is expected to have grown 1% on year in the March quarter, compared with an 11% growth in the year-ago quarter, Elara Securities said. Airfares in India grew 5% on year in the March quarter as prices of jet fuel soared because of the war. "IndiGo's international airfares grew more aggressively in March/April 2026 at 21%/54% YoY, which partly offset the traffic loss in March in the Middle East amid US-Iran war," Elara Securities said.

West Asia comprises around 50% of IndiGo's total international departures. The airline reduced its operations in West Asia to around 35 flights a day now compared with about 150 flights a day before the war. Around 15% of its total capacity is deployed in that region.

Around 30-40% of an airline's operating expenses is paid towards fuel costs, including aircraft lease payments. Following a sharp rise in jet fuel prices, IndiGo introduced a flat fuel surcharge of INR 425 for domestic and flights within the Indian subcontinent, and INR 900 on flights to West Asia on Mar. 14. In April, it 'recalibrated' fuel surcharge for domestic flight tickets and sharply increased the charges levied on international flights on a variable basis. Analysts expect InterGlobe Aviation's available seat kilometres, a metric to measure an airline's total carrying capacity, to report a muted growth of between 2 and 5% on year for the March quarter.

InterGlobe Aviation's earnings before interest, tax, depreciation, amortisation, and rentals for the March quarter are expected to be INR 23.30 billion, according to the average of five estimates. These estimates range widely, with the lowest estimate being INR 4.46 billion by Motilal Oswal Financial Services Ltd. and the highest estimate being INR 47.47 billion by Emkay Global.

For FY26, Prabhudas Lilladher expects InterGlobe Aviation's bottom line to rise a shade over 7% on year to INR 77.97 billion and its top line to grow 6% on year to INR 858.07 billion.

The company will disclose its March quarter financials on Friday. The market will track the management's cmmentary on international expansion plans, and the addition of new networks and code-sharing agreements.

Tuesday, shares of the company closed at INR 4,480.80 on the National Stock Exchange, down 0.5%. The stock has fallen roughly 9% since the company reported its December quarter earnings on Jan. 22.

Of the nine brokerage reports on the company available with Informist, five have a 'buy' or equivalent recommendation on the stock with an average target price of INR 5,940. This is nearly 33% higher than the current market price. Two brokerages have a 'hold' recommendation and the other two have a ‘sell' recommendation on the stock.

The following are the March quarter earnings estimates for InterGlobe Aviation Ltd. from six brokerages in ascending order of the estimate of loss in INR billion:

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Edited by Akul Nishant Akhoury

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