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The stock of InterGlobe Aviation, which runs IndiGo Airlines, crashed 19 per cent last Friday, despite a handsome 24 per cent year-on-year rise in profit in the December quarter. Two factors are to blame. First, the notes to accounts revealed that the delivery of the fuel-efficient A320neo aircraft by Airbus had been delayed. This raised concerns of IndiGo having to scout for costlier aircraft leasing options.
The September quarter results threw negative surprises. Profit was just about ₹113 crore, far lower than the ₹640 crore in the June quarter and the record ₹657 crore in the December quarter. Sure, the September quarter is a weak one for airlines in India, but the extent of the fall in profits raised concerns.
From its listing in November, the stock had rallied more than 50 per cent from its IPO price of ₹765. This left little room for disappointment. No surprise then that the market ignored the airline’s stellar performance in the December quarter when low fuel costs and high passenger numbers translated into improved margins and record profit.
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