IndiGo Q3 profit falls 18% to Rs 2,449 Cr on forex loss; plans more global destinations this fiscal
IndiGo CEO Pieter Elbers said results were driven by robust demand in the market, and its ability to cater to that demand supported by lower fuel prices.
The country's largest airline IndiGo on Friday saw its profit after tax slide 18.3% to Rs 2,448.8 crore in the three months ended December 2024 due to foreign exchange loss even as revenue jumped on higher capacity and passenger traffic.
The carrier, which had a fleet of 437 planes at the end of December, is planning to induct wet-leased planes for long-range flights and expects the number of grounded aircraft to come down to 40s by the start of next financial year from the current level of 60s.
With the increase in the number of capacity and passengers, the carrier's total income jumped 14.6% to Rs 22,992.8 crore in the third quarter of the current financial year. In the year-ago period, the same stood at Rs 20,062.3 crore, according to a release.
InterGlobe Aviation is the parent of IndiGo, which flew 31.1 million passengers in the latest December quarter.
In the 2023 December quarter, the carrier had a profit after tax of Rs 2,998.1 crore.
By the end of this fiscal, the airline expects to fly to 40 international destinations. Currently, the airline operates in 38 overseas cities.
"Driven by strong demand for air travel, continued growth, and lower fuel cost, for the quarter ended December 2024, IndiGo reported a solid profit of Rs 38.5 billion, excluding the impact of currency movement, as against a profit of Rs 30.5 billion during the same period last year. Including the impact of foreign exchange, the net profit for the quarter aggregated to Rs 24.5 billion," the release said.
IndiGo Chief Financial Officer Gaurav Negi said profitability was impacted by rupee depreciation in the December quarter.
"At the end of the quarter, it depreciated around 2% compared to the September quarter, resulting in a mark-to-market (MTM) foreign exchange loss of around Rs 14 billion.
"... for every rupee movement leads to a MTM of Rs 7.9 billion at the end of December. This impact is recorded in the foreign exchange line item... while currency remains volatile and further depreciated in January, we have been actively taking steps to reduce the volatility in the financial statement by hedging part of our foreign currency outflow," he said.
Fuel cost, which accounts for a significant chunk of an airline's operational expenses, fell 6.1% to Rs 6,422.6 crore in the latest December quarter even as total costs climbed 19.9% to Rs 20,465.7 crore.
"We delivered a strong third quarter of financial year 2025, both operationally and financially... including currency impact, we reported a profit of Rs 24.5 billion highlighting effective execution of our clear and well-defined strategy," IndiGo CEO Pieter Elbers said.
He also noted that these results were driven by robust demand in the market, and its ability to cater to that demand supported by lower fuel prices.
On the Aircraft on Ground (AOG) situation due to Pratt & Whitney engine woes, Elbers said, "We have turned a corner on the grounding situation when it comes to AOGs. Now, it is on a downward trajectory". The number of AOGs is now in the 60s.
"Based on the latest guidance from OEM, we will begin the next financial year with groundings in the range of 40s and expect the number to further go down as the year progresses," he said.
Elbers said that subject to regulatory approvals, the airline is exploring interim solutions for an earlier introduction of long-range aircraft to its fleet through wet-leasing of planes.
Routes and network opportunities are also being explored at present, he said, adding that in the last two years, amid the disruption of the supply chain environment, "we have developed the capability of leveraging secondary market capacity to cater to the robust demand. We are hopeful that soon we will be able to cater
to the demand in the long haul markets too".
In the current quarter, Negi said the airline had recorded a gain of Rs 591 million on its hedging contracts.
Elaborating on the carrier's hedging strategy, he said hedging positions will be enhanced and as more international capacity is added, it expects the natural hedges to also improve.
Around 10% of the airline's revenue comes from international operations.
"Hedging strategy is currently looking out for next 12 months... we have a certain amount of inflow which comes as a natural hedge... Whatever is the natural hedge is taken out which is 10% in terms of revenues coming from international. We have some inflows that come from incentives received on
deliveries.
"In aggregate, we are hedging for the next 12 months for 60%-70% of our positions. Going forward, we will test whether we have to extend the 12-month window to a longer window...," Negi said.
During the 2024 December quarter, the airline's yield (revenue per passenger) fell 1% to Rs 5.43.
For the fourth quarter ending March this year, the airline expects capacity in terms of ASKs to increase by around 20% compared to the year-ago period. ASK or Available Seat Per Kilometre is around 28% for international flights.
The airline said the capitalised operating lease liability was Rs 495,937 million at the end of December. "The total debt (including the capitalised operating lease liability) was Rs 6,51,385 million".
Edited by Suman Singh