InvestorQ : What should I do with my holdings in Indigo after the huge losses reported?
Anamika Sodhani made post

What should I do with my holdings in Indigo after the huge losses reported?

Answer
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Angel dcosta answered.
3 months ago


IndiGo reported net losses of Rs.871 crore for the Mar-20 quarter. This was largely on the back of travel disruptions due to the COVID-19 syndrome. The revenue flows were largely impacted by the national lockdown on account of Covid-19. The airline has not provided any guidance due to the prevailing uncertainty. This resulted in full year net loss of Rs.234 crore. However, the fourth quarter revenues were marginally higher at Rs.8299 crore. The real impact may be visible in the first quarter as the March lockdown was limited. The sharp rise in costs resulted in EBITDA margins falling from 27% to just 1% in the Mar-20 quarter. Just to give an example of the cost spike; fuel costs were up by 3% while lease rental costs were up by a whopping 75% leading to compression in margins. The challenges are likely to stay for some time so the stock is best avoided.