IndiGo’s profit hit on account of rupee depreciation | Company Business News

A record number of passengers flying in the October-December period helped InterGlobe Aviation, the parent company of IndiGo, report better-than-expected revenue, but a sharp fall in the rupee against the dollar hurt the profitability of the country’s largest airline. 

As IndiGo’s lease liabilities are dollar-denominated, a 2% depreciation of the rupee against the dollar in the latest quarter led to a foreign exchange loss of ₹1,456.4 crore in the October-December period, compared to a forex loss of ₹50.9 crore in the year-ago period. 

InterGlobe Aviation, which runs IndiGo, reported a 13.7% increase from the year-ago period in revenue to ₹22,992.8 crore in the three months ended December.  

Also Read | IndiGo offered ₹6,000 bribe to remove complaint on X, says podcaster Prakhar Gupta

However, expenses jumped 20% from the year-ago period to ₹20,465.7 crore in the December quarter. In addition to the forex loss, costs of leasing aircraft for short-term use, also called wet leases in airline parlance, accounted for about 14% of total expenses, and which increased 14% to ₹2,858 crore.   

Hearteningly for investors, fuel costs, which account for a third of total expenses, dropped 6.1 % to ₹6,422.6 crore. 

Also Read | ‘IndiGo treats its passengers badly’: Padma Shri awardee slams airline; social media responds

As expenses rose faster than revenue growth, profit after tax fell 14.3% to ₹2,449 crore. 

Analysts at JM Financial, a brokerage, expected IndiGo to report a net profit of ₹2,555.9 crore.

“We delivered a strong third quarter of financial year 2025, both operationally and financially,” said Indigo chief executive Pieter Elbers.

A record number of 4.28 crore domestic passengers, the highest ever were carried by Indian airlines in the October-December period, according to DGCA data. Since IndiGo is the largest carrier, it benefitted the most. 

“Look, forex currency is something which is beyond us…But if you look at running the business side, a 26% jump in profit to ₹38,461 million shows that our strategy is playing out,” CEO Elbers said in a post-earnings interaction with analysts. 

Also Read | IndiGo and Air India are taking the battle to each other like never before

For now, a tenth of Indigo’s revenue comes from outside India, and the management stated that a rising share of the airline’s international business could play a “natural hedge” against rupee depreciation. 

Vinit Bolinjkar, head of Equity Research, Ventura Securities, told Mint, “Barring for FX related reductions the result of IndiGo was very much in line with expectations. Strong growth both in terms of revenue and Ebidtar.”

Indigo, founded in 2006 and going public in 2015, has built an unassailable lead with a 61.9% market share by passenger numbers, triple that of Air India at 16.4%, the country’s second-largest carrier. To retain its lead, the airline placed a record order of planes from Boeing and Airbus, and management said it expects to get, on average, one plane every week in the coming decade. 

Earnings before interest, taxes, depreciation, amortization, and restructuring, or rent costs, or Ebitdar, improved 10.7% to ₹6,059 crore. Ebitdar is an important operational metric for airlines. 

“We added 50 new routes in the third quarter. As India’s economy maintains its position and Indian businesses expand internationally, air travel demand is poised to grow,” said Elbers.  

IndiGo, with a fleet of 437 aircraft, is one of the airlines globally,  plagued by issues around engines supplied by Pratt and Whitney, the US engine maler. Indigo does not quantify the exact number of planes grounded in the quarter, but indeed says planes which are grounded are in the ’60s’.

“The AOG situation has crossed its peak, as the grounding of aircraft is in the 60s,” chief financial officer Gaurav Negi told analysts after the earnings. “We will begin the new fiscal year with AOG in the 40s. In the last quarter, our capacity grew by 12%, and we are expecting to add capacity by 20% in Q4,” he said. 

Indigo’s shares ended 0.6% higher at ₹4,162.80 a share on Friday, while Sensex ended 0.4% lower at 76,190.4 points. The earnings were announced after the end of trading.