Stock Tips: InterGlobe Aviation, the parent company of Indigo, which provides cheap air service, came in profit in the December 2021 quarter after a loss of seven consecutive quarters.
Indigo Outlook: The aviation sector, which is battling the Corona epidemic, got relief in the last quarter. The government relaxed the restrictions related to the epidemic regarding operations, which had an impact on the health of the airlines. InterGlobe Aviation, the parent company of cheap air service provider Indigo, came in profit in the December 2021 quarter after seven consecutive quarters of losses. IndiGo’s profit was more than the estimates of market experts and they believe that it has Due to the availability of sufficient amount of cash, the position in the market will remain strong. The Indian aviation sector is growing rapidly and market experts are advising to invest in IndiGo considering its better profit potential. Brokerage firm Reliance Securities has retained the target price of Rs 2750 with buy rating for investment in IndiGo.
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For these reasons, experts have confidence in the fast
- In the last quarter October-December 2021, there was a sharp jump in the load factor of the aviation industry. Load factor means the number of seats available in the aircraft for the passengers. It is measured in percentage and the higher it is, the more the airline can spread its fixed cost among passengers. There is an increase in the load factor of most of the airlines.
- Due to the recent trend of increase in cargo traffic, there may be a jump in the profits of the companies. Reliance Securities expects double-digit growth in cargo movement in the next two to three years.
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- In the financial year 2023, due to the increase in vaccination, the number of international travelers will increase and traffic in foreign markets will also increase.
- Airfares have increased in the last one year and are expected to remain strong due to increased demand. There may be a boom in air travel in the coming months and IndiGo as a market leader is in a better position to take advantage of this and its impact will be reflected in the financial results in FY 2023. However, there is a possibility of loss for the company in this quarter January-March 2022.
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Shares have jumped more than 4 percent in five days
On Friday (February 4) on the NSE, Indigo’s prices strengthened by about one and a half percent and closed at Rs.1971. In the last five trading days, it has jumped 4.48 percent from the price of Rs 1886.55 to reach the price of Rs 1971. Talking about the year, it has strengthened by 17.26 percent.
(The stock recommendations given in the story are those of the respective research analyst and brokerage firm. Financial Express Online takes no responsibility for the same. Investments in capital markets are subject to risks. Please consult your advisor before investing.)
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