Edelweiss expects pressure on IndiGo's performance, maintains ‘hold’ on stock

Mumbai: IndiGo’s revenue and capacity increase has been "clouded by a fall in passenger yields, resulting in profit growth lagging volume spurt," said Edelweiss Research in a recent report.

It maintained a position of "Hold" on the airline stock.

"As we roll over to FY19 (estimates) we expect competition and fuel cost rise to pressurise performance. We value Indigo at 8.0x FY19E EBITDAR yielding target price of INR947. We maintain 'Hold'", it said.

The stock Thursday closed at Rs 838.05, down 1.20% on the Bombay Stock Exchange.

Net profit for India's biggest airline by market share slipped 25% in the October-December quarter to Rs 486.5 crore as lower yields and increasing fuel prices hurt.