Shares of IndiGo’s parent firm InterGlobe Aviation rose on Wednesday, a day after the company announced a change in management.
The low-cost carrier has appointed Gaurav Negi as the Chief Financial Officer (CFO) in place of Jiten Chopra who has put in his resignation. Prior to joining
IndiGo, Negi spent 22 years with General Electric Company, where he was part of their Global Leadership programmes in finance and executive management, the firm said in an exchange filing.
Investors welcomed the development with the airline firm’s shares rising 1.5 percent in early trade. At 10:45 am, the stock was trading 1.1 percent higher at Rs 1,984.90 on the BSE.
IndiGo shares have given a return of 7.7 percent in the past five days as against the benchmark index Sensex which has risen 1.4 percent during the period. Meanwhile, in the one-year period, the aviation stock has increased investors’ wealth by more than 25 percent.
Deven Choksey of KRChoksey explained that the aviation firm faces challenges pertaining to retaining people. Key management members are largely attributed to starting off two new airlines and so, there may be some shifting of members from existing players like IndiGo to the upcoming ones.
He also pointed to the rising aviation turbine fuel (ATF) prices, which he said the airlines have been passing over in the best manner possible. However, there is uncertainty on how sustainable are the ways they have adopted.
Hence, there may be some headwinds though the business conditions after the opening up of the economy would remain extremely favourable to the airline and hospitality businesses, he said.
“The pressure would be on the cost and that is where you will likely to see the resistance headwinds... Not too sure whether to buy immediately into them (airline stocks), maybe corrective prices could help take the decision faster,” he told CNBC-TV18.
Meanwhile,
JPMorgan upgraded Interglobe Aviation’s rating from ‘underweight’ to ‘neutral’ rating earlier this week. According to the global brokerage firm, peak crude could signal the peak of a downgrade cycle. FY23 will be another loss-making year, and thus it has cut its FY23 EBITDA by 44 percent due to crude.
(Edited by : Akanksha Upadhyay)
