Interglobe shares plunge on weak Q2 numbers of IndiGo revealed while declaring Q3 results

Interglobe shares plunge on weak Q2 numbers of IndiGo revealed while declaring Q3 resultsThe Bombay Stock Exchange, the oldest stock exchange in Asia, is again planning to get listed. Picture: BSE buildingwikimedia

Interglobe Aviation, which owns IndiGo, announced its third quarter results on Thursday and its shares plunged on Friday by about 20%, sending other aviation stocks such as Jet Airways and SpiceJet to nosedive.

Though Interglobe Aviation reported a 24% rise in its third quarter net profit at Rs 657 crore, its second quarter profit at a low of Rs 112.6 crore caused the sharp correction on the BSE.

At around 2.15 pm, the Interglobe Aviation stock was trading at Rs 991.75, down 17.18% and off from the day’s high of Rs 1,180.

The company that owns India’s biggest air carrier by market share, earned Rs 4,273.39 crore in revenues from operations during the third quarter, up 11.3% from Rs 3,838.09 crore from the corresponding quarter last fiscal.

Its second-quarter financial results were not available till Thursday since the company got listed only in November last year and initiated its IPO activities a month prior to it.

The company raised Rs 3,010 crore through its IPO, issuing equity shares at Rs 765 per share. The shares listed at a premium on the stock exchanges.

IndiGo’s market share in domestic air traffic was 35.6% in December 2015, marginally up from 35.5% in the previous month.

“IndiGo’s nine-month performance in FY16 was much below estimates due to a sharp fall in profitability in the second quarter, where net profit declined to Rs 110 crore from Rs 640 crore in the first quarter,” said Kotak Securities, reports NDTV.

The second quarter is seasonally weak for air carriers forcing them to resort to steep discounts, which in turn hits profit margins.

SpiceJet reported net profit of Rs 23.77 crore in the second quarter, down from Rs 71.84 crore in the first quarter.

Shares of SpiceJet and Jet Airways were trading with losses in the range of 6 to 7% at around 2.30 pm.

The S&P BSE Sensex was up 497 points, or 2.08% at 24,459.87.

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