InterGlobe Aviation Q1 Results Preview: Indigo’s PAT likely to dip despite up to 9% revenue growth. Here’s why

InterGlobe Aviation, which operates budget airline IndiGo, will announce its Q1 earnings on Wednesday, July 30 where the company is expected to report a decline in profitability in Q1FY26 as per estimates from leading brokerages.

While revenue is projected to grow modestly on a YoY basis, higher base, weaker load factors, and stable-to-soft yields are likely to drag down PAT and EBITDAR on a quarter-over-quarter basis.

The market will closely monitor management’s commentary on grounded Pratt & Whitney (P&W) engine aircraft and international expansion strategies.

The estimates from Nuvama Institutional Equities, Motilal Oswal Financial Services (MOFSL) and JM Financial have been taken into account. Here’s what they recommended:

PAT

Nuvama: Rs 2,773 crore, up 2% YoY and down 10% QoQ

Motilal Oswal: Rs 2,380 crore, down 12% YoYKotak Equities: Rs 2,173 crore, down 20.4% YoY and down 29.2% QoQ JM Financial: Rs 2,513 crore, down 7.9% YoY and down 18.1% QoQ

All brokerages foresee a sequential drop in profit, citing weak load factors, pressure on yields, and elevated operating costs.

Revenue

Nuvama: Rs 21,024 crore YoY, up 7% YoY and down 5% QoQ

Motilal Oswal: Rs 21,350 crore, up 9.1% YoY

Kotak Equities: Rs 21,267 crore, up 8.7% YoY and down 4% QoQ

JM Financial: Rs 20,947 crore, up 7% YoY and down 5.4% QoQ

EBITDAR/EBITDA

Nuvama: EBITDAR seen at Rs 6,434 crore up 11% YoY and down 7% QoQ

Motilal Oswal: EBITDAR is pegged at Rs 6,140 crore

Kotak Equities: EBITDA expected at Rs 5,244 crore, up 1.6% YoY and down 13.9% QoQ

JM Financial: EBITDA of Rs 5,420 crore expected, up 5.1% YoY and down 11% QoQ

EBITDA/EBITDAR growth is expected to slow down QoQ despite lower fuel CASK, as revenue yield softens and load factor slips from previous quarters.

EBITDAR stands for Earnings Before Interest, Taxes, Depreciation, Amortization, and Rent (or Restructuring) costs.

EBITDA/EBITDAR margin

While Motilal Oswal expects EBITDAR margin at 28.8% versus 29.5% in the year ago period, Kotak Equities has estimated EBITDAR margin at 24.7%, declining by 171 bps YoY and 284 bps QoQ).

Key monitorables

The brokerages have suggested monitoring updates on Indigo’s grounded aircraft along with clarity on P&W engine issues and their impact on fleet capacity.

Kotak will keep its watch on yield trend and load factor as average fares remain flat. Updates on new routes, code-share agreements, and market share gains in global operations will be key monitorables for MOFSL.

(Disclaimer: Recommendations, suggestions, views, and opinions given by experts are their own. These do not represent the views of the Economic Times)