{"id":"f-e550251d2f-315243a7-75b3-5979-98a4-9acab2112608","title":"Explained — How rising oil prices will have a negative impact on shares of IndiGo","description":"For every $5 per barrel increase in brent price, IndiGo's Earnings Per Share (EPS) is likely to be impacted by 13%, according to brokerage firm JM Financial.","timestamp":1772435647,"category":"business","headline":"Explained — How rising oil prices will have a negative impact on shares of IndiGo","modifiedHeadline":"Rising Oil Costs Could Hit IndiGo Hard—Here’s Why","subCategories":["scid_dad10ecd"],"subcategoriesName":["Energy"],"region":"IN","bundleMetaData":{"bundleId":"ece1ae3d-908e-48c7-9e53-a4aa910ee4db","bundleTitle":"Grow Your Money","cardData":null},"iabCategoryId":"118","fcSummary":"the iran-israel conflict impacts interglobe aviation (indigo airlines) shares, raising concerns about gulf airspace disruption and increased fuel costs. analysts predict reduced international flights and potential financial losses, with a prolonged disruption estimated to significantly affect earnings. despite this, most analysts maintain a 'buy' rating, though the stock has seen recent declines.","summary":"Iran-Israel conflict hurts IndiGo: Rising oil prices may slash EPS by 13% & impact airline's profits, warns JM Financial.","ctaUrl":"https://trends.glance.com/newz/Economy/IN/en/cnbc-tv18/f-e550251d2f-315243a7-75b3-5979-98a4-9acab2112608","sourceUrl":"https://www.cnbctv18.com/market/indigo-share-price-iran-israel-us-war-negative-impact-oil-prices-eps-hit-margin-contraction-risk-ws-l-19860479.htm","bannerImage":"https://g-mob.glance-cdn.com/public/fc/image/pdNqIZmsGN90.webp","content":"Shares of InterGlobe Aviation Ltd., the parent company IndiGo Airlines, are in focus on Monday, March 2, on the back of the Iran-Israel War that started over the weekend.\n
\n
\n Hospitality, particularly the aviation, tourism and hotel-linked names will have an impact as the Iran conflict as spread across the entire Gulf region with Iran retaliations hitting areas in Dubai, Abu Dhabi, and Qatar, which are key tourism hubs, as well as important transit hubs for commercial airlines.\n\n
\n
\n Brokerage firm JM Financial said the escalation of the conflict in the Middle East presents a near-term negative for IndiGo.\n
\n
\n The disruption to Gulf airspace and potential operational constraints at Dubai will possibly temporarily reduce international available seat kilometre (ASKs), depress connectivity traffic and lower aircraft utilisation, the brokerage said.\n
\n
\n A geopolitical spike in crude oil prices also poses a risk to IndiGo's margins, given the airline's high sensitivity to fuel costs and limited hedging, according to JM Financial.\n\n
\n
\n For every $5 per barrel increase in brent price, IndiGo's Earnings Per Share (EPS) is likely to be impacted by 13%, according to the brokerage.\n
\n
\n If the disruption persists for a fortnight, JM Financial has estimated ASK loss to be at ₹130 crore, and profit before tax (PBT) loss to be at ₹56.5 crore, which is close to 4% of the Profit Before Tax that the airline had reported in the December quarter.\n
\n
\n Of the 27 analysts who have coverage on the stock, 22 have a 'buy' rating, two have a 'hold' rating and three have a 'sell' rating.\n\n
\n
\n Shares of Interglobe Aviation ended the previous session 2.1% lower at ₹4,830.3 apiece. The stock has declined 14.7% in the last six months.\n
\n
Also Read: Defence stocks BEL, BDL and peers in the spotlight amidst Iran-Israel-US war\n
","readDurationInMinutes":"3","author":{"name":"CNBC TV18","logo":"https://glance-mob.glance-cdn.com/public/bubble/jpeg/ecc3d19b-fc52-4a39-881c-5b0936ae723b.jpeg"},"ism":false,"analyticsResponses":[{"measurementId":"383191425","type":"COMSCORE"}],"pointerSummary":["IndiGo's parent, InterGlobe Aviation, faces pressure as Iran-Israel conflict escalates.","JM Financial estimates a ₹130 crore ASK loss if disruptions last two weeks, impacting EPS.","Rising crude oil prices due to the conflict pose a margin risk for IndiGo, analysts warn."],"tags":["IndiGo","OilPrices","AviationSector","IranIsraelConflict","Geopolitics","BrentCrude","EPSImpact","JMFinancial","InterGlobeAviation","AirlineStocks","MiddleEastConflict","FuelCosts","ASKLoss","PBTImpact","StockMarket","Dubai","AbuDhabi","Qatar"],"redirectionEnabled":false,"consent":true}

Explained — How rising oil prices will have a negative impact on shares of IndiGo

SUMMARY