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ICICI Securities expects a strong sequential performance for IndiGo in the third quarter despite turbulence.
"We expect Indigo to show an improved QoQ performance in 3QFY22, driven by better PLFs (passenger load factors) and fares along with higher capacity flown, offset by higher crude prices. However, rising Omicron cases pose a concern for the Q4 outlook," it said.
It has forecast that Q3FY22 yields would reflect pent-up demand. "We expect RASK - Revenue per Available Seat-Kilometer - to be Rs 4.12 in Q3FY22 compared to Rs 3.7 in FY20."
It further estimates loss of Rs 2 billion in Q3FY22. It is expected that Q3FY22 financials will reflect the impact of higher crude oil prices, offset by higher demand. Thus, "we expect fuel cost per ASK to increase 11 per cent QoQ in Q3FY22, while RASK is expected to rise by 16 per cent QoQ."
The PLF of Indigo moved from 78 per cent in October to 81/~80 per cent in November/ December. This will also aid PLFs in Q3FY22, it said.
QoQ growth in ASK is expected to be 40 per cent. Stronger than expected fares can lead to a positive surprise, which would pose upside risk . In such a case, IndiGo can also report profits.
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