InterGlobe Aviation Limited — Q4 FY25 earnings call

Call held 21 May 2025

Management summary

IndiGo delivered its strongest-ever Q4 performance with 13.8% net margin, driven by Maha Kumbh demand surge and strong international growth. The airline crossed the USD 10 billion revenue milestone for FY25 while maintaining cost discipline despite AOG challenges. Strategic initiatives including Stretch business class, widebody B787 operations (Delhi-Bangkok launched, Amsterdam and Manchester from July), and investment-grade credit rating position IndiGo for its global aviation ambitions. Management flagged short-term yield pressure from geopolitical disruptions post-April 22 but expressed optimism about recovery.

Highlights

  • Total income of INR 231 billion for Q4 FY25, net profit of INR 30.7 billion (13.8% margin) vs INR 18.9 billion (10.6% margin) in Q4 FY24

  • Full year FY25 revenue crossed USD 10 billion mark for first time - total income of INR 841 billion, up 18% YoY

  • FY25 net profit of INR 72.6 billion (INR 88.7 billion ex-forex), closely aligned with FY24 performance

  • Served ~32 million passengers in Q4 (+20% YoY), 118.6 million for full year (+11% YoY), international growth 30%+

  • 67 net aircraft additions in FY25; AOGs reduced from mid-70s in Q2 to 40s currently; redelivered 13 damp-leased aircraft

  • Free cash position improved to INR 331.5 billion, up INR 42.5 billion QoQ; received investment-grade Moody's rating

  • Declared final dividend of INR 10/share (first in 5 years); retained earnings turned positive

  • Launched IndiGoStretch (business class) on 5 domestic routes with 16 aircraft; BluChip loyalty program reached 2.9 million sign-ups in 7 months

Concerns

  • Geopolitical disruption impacting bookings and yields post-April 22

Key financials

5 periods

Headline

  • Free Cash
    ₹33,150 Cr

Q4

  • Total Income
    ₹2.31L Cr
  • Net Profit
    ₹3,068 Cr
    YoY +62.4%
  • Net Profit Margin
    13.8%
  • CASK ex-fuel ex-forex
    ₹2.94
    YoY +2.8% QoQ +1.4%
  • Load Factor
    87.4%

FY25

  • Total Income
    ₹84,100 Cr
    YoY +18%
  • Net Profit
    ₹7,258 Cr
    YoY -11.2%
  • Net Profit ex-Forex
    ₹8,868 Cr
  • EBITDAR
    ₹21,250 Cr
    YoY +21.2%
  • Passenger Revenue
    ₹69,700 Cr
    YoY +15%

net additions FY25

  • Fleet Size
    67 aircraft

RASK Q4

  • Unit Revenue
    ₹5.26
    YoY +3%

What they filed

Q1 FY27: revenue up 19.9%, net profit down 117.7% against the same quarter last year.

₹ Cr · quarterly
Line itemQ2 FY25Q3 FY25Q4 FY25Q1 FY26Q2 FY26Q3 FY26Q4 FY26Q1 FY27
Revenue16,970 22,111 22,152 20,496 18,555 +9%23,472 +6%22,438 +1%24,584 +20%
EBITDA1,618 5,160 6,082 5,205 545 −66%5,353 +4%741 −88%3,211 −38%
Net profit-989 2,442 3,073 2,161 -2,614 −164%613 −75%-2,662 −187%-382 −118%
How to read this

₹ crore, as filed. The percentage beside a figure is the change against the same quarter a year earlier — never the quarter before, which would make every seasonal business look like it collapses and booms each year.

Segment breakdown

  • Passengers Carried
    32 Mn Q4 Passengers118.6 Mn FY25 Passengers41 International Destinations

Guidance & targets

Capacity

  • ASK Growth FY26 Capacity · FY26 · High confidence Early double digits
    we have already provided capacity guidance that we will broadly grow our capacity by early double digits as compared to the financial year 2025

    — Gaurav Negi

  • Q1 FY26 ASK Growth Capacity · Q1 FY26 · High confidence Mid-teens YoY
    For the first quarter of financial year 2026, we expect to add mid-teens capacity compared to the same period last year

    — Gaurav Negi

Costs

  • CASK ex-fuel FY26 Costs · FY26 · Medium confidence Similar to FY25 levels
    we are making this attempt to make sure that the cost levels remain at the same levels that we had in 2025

    — Gaurav Negi

Network

  • International ASK Share Network · FY30 · High confidence 40%+ by FY30

    From ~30% currently today

    In terms of international capacity share, this year, we have reached around 30 percent of total ASKs, and we have projected that to go up to more than 40 percent by the end of financial year 2030

    — Pieter Elbers

Fleet

  • Widebody Fleet by 2030 Fleet · FY30 · High confidence ~30 aircraft on total fleet of ~600
    the wide bodies eventually in 2030 will be in the range of 30 on a total fleet basis of around 600 aircraft

    — Pieter Elbers

Capital

  • Cash Safety Net Capital · Ongoing · High confidence 20-25% of top line
    As a thumb rule, we have mentioned that it's going to be somewhere around 20% to 25% of our overall top line

    — Gaurav Negi

Risks & concerns

  • Geopolitical disruption impacting bookings and yields post-April 22

    high

    Sharp decline in bookings and spike in cancellations after India-Pakistan tensions; recovery started but pace uncertain. Q1 FY26 PRASK guidance uncertain.

    Both acknowledged

  • Pakistan airspace closure affecting international route economics

    medium

    2 destinations suspended, 34 flights affected with 20-30 min extra flying time. Management emphasizes limited impact but it could affect Delhi-Europe long-haul economics.

    Analyst downplayed

  • Turkish Airlines codeshare/damp lease renewal uncertainty

    medium

    Codeshare with Turkish up for renewal amid anti-Turkey sentiment. Management deferred to government framework, claimed backup plans exist.

    Analyst deflected

  • Low-cost long-haul execution risk

    medium

    Global track record of low-cost long-haul is mixed. IndiGo starting with damp-leased B787s to Amsterdam/Manchester - unproven territory for the airline.

    Analyst downplayed

  • Rising capitalized lease liabilities from shift to finance leases

    low

    Total debt including capitalized lease liability at INR 668 billion. Finance lease mix increasing, which carries higher liability than operating leases.

    Analyst acknowledged

Areas of evasion (2)

  • Turkish Airlines codeshare renewal specifics
  • Stretch load factor details deemed 'too early'

Q&A highlights

3 direct
Geopolitical impact on yields and bookings Direct
Between the period of April 22, still, I would say a few days back, the cancellation and the booking trends have taken a sharp decline... at least from our vantage point, we have seen the worst in terms of the peaking of the cancellation

Near-term revenue visibility is clouded by India-Pakistan tensions; management sees worst behind but recovery pace uncertain

Asked by Binay Singh (Morgan Stanley)

Pakistan airspace closure impact on operations and long-haul plans Direct
IndiGo operates 131 destinations. Due to the closure of the Pakistani airspace, we have suspended 2... we have 2,200 daily flights. And there, we have a total of 34 being affected

Limited operational impact (34 of 2,200 flights affected) but raises questions about long-haul European route feasibility from Delhi

Asked by Achal Kumar (HSBC)

Capital allocation strategy including dividends, asset ownership, and digital investments Direct
A massive amount of investments we are doing in various digital tools for us to prepare for the growth that we see and the infrastructure that we need to build by 2030

Shift from pure operating lease model to asset ownership (8 ATRs bought, engines) signals maturing capital strategy with widebody purchases from 2027

Asked by Kushagra (CWC Advisors)

2 min read 5 chapters

Detailed narrative

Record Q4 Performance Driven by Demand Surge

IndiGo delivered its best-ever Q4 with net profit of INR 3,068 crores at 13.8% margin, up from INR 1,890 crores (10.6%) in Q4 FY24. The quarter benefited from Maha Kumbh-driven domestic traffic surge and strong international demand, serving ~32 million passengers (+20% YoY). International traffic grew 30%+ YoY. Full-year revenue crossed USD 10 billion for the first time at INR 84,100 crores (+18% YoY).

AOG Situation Improving, Damp Lease Costs to Moderate

Aircraft-on-ground count declined from mid-70s in Q2 FY25 to 40s currently. IndiGo redelivered 8 damp-leased aircraft in Q4 and 5 more in April. CASK ex-fuel ex-forex was INR 2.94 (+2.8% YoY) driven by maintenance escalations and currency depreciation, but management guided costs to remain at FY25 levels in FY26 as damp lease savings offset inflationary increases.

International Expansion and Widebody Strategy Taking Shape

International destinations grew from 25 to 41 in three years (+65%). First B787 deployed on Delhi-Bangkok; Amsterdam and Manchester launching from Mumbai in July via damp-leased Norse Atlantic aircraft. International ASK share at ~30%, targeted to exceed 40% by FY30. Fleet plan envisions ~30 widebodies on total fleet of ~600 by 2030, with A350 XLRs filling the 6-9 hour range.

Balance Sheet Strength and Capital Allocation Evolution

Free cash reached INR 33,150 crores (+INR 4,250 crores QoQ). IndiGo received investment-grade Moody's rating and declared INR 10/share dividend (first in 5 years). Capital allocation shifting toward asset ownership - 8 ATRs purchased, engine acquisitions underway. Cash safety net maintained at 20-25% of revenue. Retained earnings turned positive, marking post-pandemic financial recovery.

Near-Term Uncertainty from Geopolitical Events

While April started strong, India-Pakistan tensions from April 22 caused sharp booking declines and cancellation spikes. Management noted the worst appears to have passed with trends stabilizing in recent days. Q1 FY26 capacity guided at mid-teens growth YoY, but PRASK outlook remains uncertain. Pakistan airspace closure suspended 2 destinations and affected 34 daily flights with 20-30 minute diversions.

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