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✈️ IndiGo Q2 FY26: Currency Turbulence vs. Operational Resilience

Lesson 187/323 | Study Time: 20 Min

Course: Quarterly Result Updates & Analysis

✈️ IndiGo Q2 FY26: Currency Turbulence vs. Operational Resilience

This analysis breaks down the Q2 FY26 performance of InterGlobe Aviation Limited (INDIGO). While the bottom line shows a deep red due to non-cash foreign exchange (FX) adjustments, the core operational engine remains robust with double-digit top-line growth.

🟢 TL;DR: The Core Highlights

✅ Top-line Growth: Revenue from operations grew 9.3% YoY to ₹18,555 crore, driven by strong demand and optimized capacity.
⚠️ FX Impact: A sharp rupee depreciation led to a non-cash FX loss of ₹2,892 crore, resulting in a reported Net Loss of ₹2,582 crore.
📊 Operational Profit: Excluding FX, the company turned an operational Net Profit of ₹104 crore, a significant recovery from a ₹754 crore loss in the same period last year.
🧭 Capacity Guidance: Management nudged up full-year FY26 capacity growth guidance to "early teens" from "early double digits".
📌 Fleet & Grounding: Grounded aircraft (AOG) remain stable in the mid-40s; the company is using damp leases to bridge the capacity gap.

📈 Quick Table: Financial Performance (Consolidated)

Particulars (₹ Crore)	Q2 FY26	Q2 FY25	YoY Change	Q1 FY26	QoQ Change
Total Income	19,600	17,759	⬆️ 10.4%	21,543	⬇️ 9.0%
Revenue from Ops	18,555	16,970	⬆️ 9.3%	20,496	⬇️ 9.5%
EBITDAR	1,114	2,434	⬇️ 54.2%	5,818*	⬇️ 80.9%
PAT (Reported)	(2,582)	(987)	⬇️ 161.7%	2,176	⬇️ 218.6%
PAT (Excl. FX)	104	(754)	⬆️ 113.8%	Not Disclosed	-
EPS (₹)	(66.8)	(25.6)	⬇️ 161.7%	56.3	⬇️ 218.6%

Key Margins & Ratios

| Metric | Q2 FY26 | Q2 FY25 | Change (bps) |

| :--- | :--- | :--- | :--- |

| EBITDAR Margin | 6.0% | 14.3% | ⬇️ 830 bps |

| EBITDAR Margin (Ex-FX) | 20.5% | 15.7% | ⬆️ 480 bps |

| Load Factor | 82.5% | 82.6% | ⬇️ 10 bps |

| Yield (₹/km) | 4.69 | 4.55 | ⬆️ 3.2% |

*Calculated from H1 and Q2 data.

🗺️ Segment & Geography Highlights

IndiGo is aggressively transitioning from a domestic leader to a global player.

Metric	Details
Network Reach	94 Domestic, 41 International destinations.
International Growth	ASKs grew 26% YoY in international sectors.
Fleet Structure	417 Aircraft (180 A320neo, 153 A321neo are the workhorses).
Strategic Goal	Aiming for 30-40% of the fleet to be owned/finance-leased by 2030 (vs. mostly operating leases now).

🎙️ Management's Take

"Our optimized capacity deployment has enabled us to deliver 10% growth in topline revenue... we have nudged up our capacity guidance for full financial year 2026 to early teens growth."

— Pieter Elbers, CEO+1

💎 Valuation Snapshot

PE (TTM): 27.4x (Adjusting for the massive Q2 FX hit, the normalized PE remains within the 5-year median band).
EV/EBITDAR: Currently trading at Amber (slightly above 5Y median) due to increased debt from lease liabilities of new aircraft inductions.
What it implies: The market is pricing in the "India Growth Story" and IndiGo's dominant 60%+ market share, looking past temporary FX volatility.

🔭 Outlook: Triggers to Watch

XLR Inductions: The arrival of A321 XLRs in early 2026 will unlock 7-8 hour non-stop international flights (e.g., Athens).
AOG Resolution: Any faster-than-expected return of grounded aircraft from the "mid-40s" range will boost margins by reducing reliance on expensive damp leases.
Loyalty Program: The "BluChip" program (7 million members) and new co-branded credit cards are key triggers for higher Ancillary Revenue.
Fuel Prices: ATF prices remain the biggest wildcard for OPM (Operating Profit Margin).

⚠️ Top 4 Risks & Monitoring

Currency Volatility: Every ₹1 depreciation against the USD leads to a ~₹900 crore MTM loss.
Engine Issues: Continued dependency on OEM (Pratt & Whitney) for resolving grounding issues.
Policy Changes: Potential implementation of free flight cancellations/name changes by regulators.
Cost Inflation: Implementation of new Flight Duty Time Limitations (FDTL) increasing pilot cost.

⚖️ Fairvalue:

https://docs.google.com/spreadsheets/d/e/2PACX-1vQnnMPrFv_rMI3oum6i0vdIDprwF9_e1-GNTwav2jLv5jCchU4vn_M-r74xWQey-g/pubhtml?gid=1870668169&single=true

⚖️ Disclosure

Educational purposes only. This is not investment advice or a buy/sell recommendation. Past performance does not guarantee future results. Data sourced from company filings dated Nov 4, 2025. The author/team may have positions in the mentioned stock.

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Piyush Patel

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