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InterGlobe Aviation shares shed 11% to hit one-month low post June quarter earnings

Shares of InterGlobe Aviation tanked 7 per cent to hit their one-month low after the company, which owns budget carrier IndiGo, reported around 7.4 per cent decline in net profit at Rs 591.77 crore in the June quarter. 

BT Online   New Delhi     Last Updated: August 2, 2016  | 16:45 IST
InterGlobe Aviation shares shed 10% to hit one-month low post June quarter earnings
Photo: Reuters

Shares of InterGlobe Aviation tanked over 11 per cent to hit their one-month low after the company, which owns budget carrier IndiGo, reported around 7.4 per cent decline in net profit at Rs 591.77 crore in the June quarter.  

The company had posted a net profit of Rs 638.89 crore in the same period last fiscal year.

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Reacting to the earnings, the stock of InterGlobe hit an intraday low of Rs 860.25, down 11.67 per cent on the BSE.

The company said competitive ticket pricing hit their profit margin.

"Profitability was lower than last year primarily because of competitive fare pressures. We have reduced our debt by Rs 458.9 crore during the quarter," IndiGo President and Whole-time Director Aditya Ghosh said.


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The company also said its budget airline IndiGo might have to delay taking delivery of more Airbus A320neo aircraft to provide for the engine supplier time to sort out engine problems

Market analysts warn that profitability of the company may be impacted as competition remains intense.

Brokerage Ambit Capital cut earnings forecasts for the company, and reiterated 'sell' rating on the stock, saying "sustained double-digit passenger growth should come at cost of margins".

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