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Informist, Tuesday, Jan. 20, 2026

 

By Anand JC

 

NEW DELHI – InterGlobe Aviation Ltd., which operates budget carrier IndiGo, is expected to report a sharp contraction in its bottom line and only a modest growth in its top line for the December quarter, dragged down by severe operational disruptions, which saw around 4,500 flights being cancelled in the latter part of the quarter. The reporting quarter is typically IndiGo's strongest, particularly in the domestic market where it is the clear leader. However, the robust outlook the company guided for in November--driven by expectations of significant capacity additions--was derailed after operational disruptions forced the regulator to clip the airline's wings.

 

InterGlobe Aviation's net profit for the December quarter is expected to fall 33% on year to INR 16.47 billion, according to the average of six brokerage estimates. The highest estimate for bottom line is INR 21.90 billion by Motilal Oswal Financial Services Ltd. and the lowest estimate is INR 8.66 billion by Nuvama Wealth Management Ltd. In the trailing quarter, the company had reported a loss of INR 26.14 billion -- the eighth time it did so for the September quarter.

 

The company's top line for the December quarter is projected to rise 4% on year to INR 229.78 billion, according to the average of six estimates. The estimates for the company's top line range from a low of INR 225.15 billion by Prabhudas Lilladher Pvt. Ltd. to a high of INR 236.19 billion by Motilal Oswal. If the estimates turn out right, this would be the weakest year-on-year growth in InterGlobe Aviation's top line since the March quarter of 2021, when the top line had contracted 25% on year due to the disruption caused by the COVID-19 pandemic.

 

IndiGo is India's largest airline by scale. In the previous financial year, the carrier was operating over 2,200 flights daily across 131 destinations, including 91 domestic and 40 international, with a fleet of 434 aircraft. The company currently has an outstanding order book of over 920 aircraft, with deliveries expected till 2035. The airline dominates Indian skies with a market share of over 60% of the domestic market, according to data from the Directorate General of Civil Aviation as of November.

 

DECEMBER DEBACLE

The December quarter had started on a strong note for InterGlobe Aviation. "Based on the trends that we've seen in October, there is definitely an increase in the yields," the company's Chief Financial Officer Gaurav Negi had told investors in November. "Again, that is also given the fact that Diwali, which was in November last year has moved into October. So, we did have a very strong October performance," Negi had said. That optimism was short-lived as the situation unravelled rather quickly in early December.

 

IndiGo cancelled flights at scale after failing to adapt to new flight crew duty and rest regulations, officially set by the DGCA under Flight Duty Time Limitations norms. Disruptions were reported across major airports such as New Delhi, Mumbai, Bengaluru, and Hyderabad. The company cancelled nearly 4,500 flights in early December, according to media reports. In January, DGCA fined the company INR 222 million and issued warnings to its senior management.

 

Authorities asked IndiGo to ensure refunds and compensations to the affected passengers. Additionally, IndiGo was asked to temporarily scale back its flight plans in December to help the company stabilise its operations.

 

The company's earnings before interest, depreciation, amortisation, and rentals for the December quarter is expected to be INR 54 billion, which would translate to a year-on-year fall of 11%, according to the average of five estimates. The estimates for the company's EBITDAR for the quarter range from a low of INR 44.30 billion by Nuvama to a high of INR 59.82 billion by Motilal Oswal.

 

"We expect peak earnings quarter to be one of Indigo's worst. Indigo's Q3FY26E EBITDAR to fall 25% YoY due to one of Indigo's worst operational disruptions while regulatory action outcome is uncertain," Nuvama said in a report. The brokerage expects InterGlobe Aviation to incur foreign exchange losses of INR 11 billion due to a weaker rupee and due to costs related to the disruptions in December, which include compensation vouchers, accommodation, refreshments, among others, to affected passengers.

 

GUIDANCE LOWERED

After the DGCA asked IndiGo to curtail its flights on Dec. 9, its parent company revised its guidance for the December quarter downwards. The company expects its capacity to grow by high single-to-early double-digits on year in the reporting quarter, down from expectations of a high-teens growth guided for in November. Capacity growth is measured in average seat kilometres, calculated as the number of available seats multiplied by the distance flown. The company's average seat kilometres had grown 12% in the year-ago quarter and 8% in the September quarter.

 

"We expect a 8% yoy increase in ASK (lower-end of guidance) on the back of mass flight cancellations in December, with 150 bps lower yoy load factor at ~85.5%," Kotak Securities Ltd. said in a report. The load factor is calculated by dividing the number of seats filled in an aircraft by the total number of seats available, which measures the percentage of seats that passengers actually occupy. IndiGo had reported a load factor of 86.9% in the year-ago quarter and 82.5% in the September quarter.

 

InterGlobe Aviation expects a mid-single-digit contraction in its passenger unit revenue, lower than the flattish-to-slight growth guided for in November. This is measured in passenger revenue per available seat kilometre, which indicates how much fare income an airline earns from passengers for every seat it flies per kilometre.

 

InterGlobe Aviation will announce its December quarter results Thursday. On Tuesday, its shares closed little more than 3% lower at INR 4,790 on the National Stock Exchange. The shares have fallen around 16% since the company announced its September quarter earnings on Nov. 4.

 

Of the eight research reports on the company available with Informist, five have a 'buy' or equivalent recommendation on the stock, with an average target price of INR 6,460, which is nearly 35% higher than the current market price. Of the remaining three, two have a 'hold' call and one has a 'sell' call on the stock.

 

Following are the December quarter earnings estimates for InterGlobe Aviation from six brokerage firms in descending order of the estimate of net profit in INR billion:

 

Brokerage	Net sales	Net profit	EBITDAR
Motilal Oswal Financial Services Ltd	236.19	21.90	59.82
Elara Securities (India) Pvt Ltd	227.84	21.22	54.47
Prabhudas Lilladher Pvt Ltd	225.15	19.12	N.A.
Kotak Securities Ltd	226.95	18.71	52.55
Emkay Global Financial Services Ltd	230.09	9.20	58.85
Nuvama Wealth Management Ltd	232.45	8.66	44.30
Average	229.78	16.47	54

 

End

 

Edited by Ashish Shirke

 

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