When we consider the wages Quarters of the financial year 2020 it can be used to assess the growth of various industries. Here in the case of IndiGo, this aviation company has managed to take off despite a loss in Quarter 4 Financial Year 2020, which has been reported. It is said that the company’s Q4 results have excited investors. This is at a time when expectations are running low for the aviation sector.
Currently, IndiGo like any other sector is passing through a very great crisis. Analysts have put it that IndiGo has plenty of cash- Rs.6500 cr. at its disposal to survive the crisis. IndiGo Airlines is run by InterGlobe Aviation Ltd. On Wednesday 3rd June the shares of InterGlobe Aviation Ltd. was trading on a high. This is despite the company’s net gross of Rs. 873 Cr for the March Quarter. This shows the airline company’s resilience potential to get through unfavorable circumstances.
The company had been estimated to report a higher loss. It has been found that IndiGo’s loss was to a large extent due to forex fluctuation. The firm’s investors are highly upbeat as far as the firm’s results are concerned. This is remarkable at a time expectation about IndiGo are running low. In the COVID-19 pandemic scenario, the outlook for the aviation sector records a total uncertainty. These are testing times for IndiGo but “Cash is the King” and the aviation company has a reassuring pile of cash.
Now the question is, given the above circumstance, can the IndiGo aviation survive the current crisis which is an overwhelming one. One can expect the company to survive given its history of performance and plenty of cash with it. In the financial year, 2020- end IndiGo has net cash of Rs.6500 Cr. Analysts hope IndiGo will survive the crisis and is well-positioned to thrive as normalcy returns. Financial Year 2021 is expected to be stormy. Still, many analysts are optimistic about the prospects for the financial year 2022.
In the mean time, investors must be aware that demand would take some time to return to the pre- COVID-19 levels. It is the pent-up demand for many months that cost a lag. Lower crude oil prices will help in these testing times. But the gains from that are limited to the extent of the rise in operations. IndiGo is now operating at 20% capacity and plans to increase this soon. The airline aviation firm is now taking various measures to ride through the COVID-19 storm effectively by shifting its focus from profitability to growth.
