InterGlobe Aviation (INDIGO IN) Buy: Further investments to strengthen business

研报英文原文证据摘录

InterGlobe Aviation (INDIGO IN) Buy: Further investments to strengthen business

ROE (%) -7.3 38.6 51.0 46.9

think having in-house engine repair facility (whenever launched) could result in unit

52-WEEK PRICE (INR)cost savings of at least 10-15 paise per ASK, that implies almost 2% to 2.5% boost to

its EBIT margin and around 15-20% boost to its fair equity value, at today’s volumes, 6500.00

maintenance cost and current stock price, per our estimates. 5050.00

Reinforces our long-term thesis: While the long-term thesis of Indigo remains rock 3600.00

07/25 01/26 07/26

solid, we believe its planned investments are set to strengthen its business multi-folds Target price: 6130.00

over the next 5 years. The company has target to double its ASKs by FY30 which means High: 6155.50 Low: 3943.50 Current: 5229.00

Source: LSEG IBES, HSBC estimates

the overall volume will increase massively and that means these savings could be much

higher when it comes. This reinforces our long-term view on Indigo.

Achal Kumar*

Analyst, Global Transport

Competition continues to melt down; Indigo’s strong balance sheet offers massive HSBC Securities and Capital Markets (India) Private Limited

support: Indigo continues to benefit from weak competition. While Air India is trying to cut achalkumar@hsbc.co.in

+91 80 4555 2751

down costs and delay aircraft orders to preserve liquidity, Singapore Airlines (SIA) also

mentioned that its board will carefully consider any request for additional capital

* Employed by a non-US affiliate of HSBC Securities (USA) Inc, and is

requirement from Air India (moneycontrol, 20 July). Yet, it continues to commit its long- not registered/ qualified pursuant to FINRA regulations

term partnership with Air India since that allows SIA to maintain access to key India

markets.