InterGlobe Aviation (INDIGO IN) Buy: Answering key questions from investors

研报英文原文证据摘录

InterGlobe Aviation (INDIGO IN) Buy: Answering key questions from investors

Equities ● Airlines

23 June 2026

Question 4 – did airlines sign up to the fuel-capping scheme? Investors have been asking if

airlines signed up for the fuel capping scheme from the government. According to our discussion,

none of the airlines have signed up for the fuel-capping scheme so far. Moreover, with fuel prices

coming down, we do not expect any airline would sign up for the scheme which means airlines would

be exposed to the market price of jet fuel.

Question 5 – how can domestic growth improve the company’s yield and profitability? At its

analyst day, Indigo mentioned that the planned domestic growth will be balanced between the

existing routes and the new routes, well supported by the massive improvement in airport

infrastructure planned by the Indian government. Indigo has already started operations at two new

airports, Navi Mumbai and Jewar (Noida) airports. If we look at Indigo’s domestic network mix, it has

a very balanced but strong presence in Metro to Non-Metro and Non-Metro to Non-Metro routes

where it holds close to 70% market share; and many of these routes generate very healthy yields.

But more importantly, some of the routes, which are yet to mature, could offer significant upside to

the company’s yield as they mature in the near term.

Sensitivity analysis

Given the volatility in crude and jet fuel price, we think it is sensible to do a sensitivity analysis of

fuel price and passenger yields on FY27e group EBITDA and EPS.

Our analysis suggests:

◆ A 2% change in yield growth could change FY27e EBITDA by c8% and EPS by c49%

◆ Similarly, a 5% change in fuel price could change FY27e EBITDA by c10% and EPS by c60%.

Sensitivity of fuel and yields on FY27e EBITDA