Emkay Global, a prominent brokerage firm, anticipates a mixed performance for InterGlobe Aviation (IndiGo), Adani Green Energy, and Waaree Energies in their June quarter (Q1) earnings reports. The analysis suggests strong growth for Adani Green, significant pressure on IndiGo due to rising fuel costs, and stable, range-bound earnings for Waaree Energies.
Adani Green Energy: Strong Growth Projected
Adani Green Energy is poised for robust volume and earnings growth in Q1. Emkay Global projects a 25% year-on-year (YoY) and 31% quarter-on-quarter (QoQ) increase in power sales. This surge is attributed to substantial capacity expansion, growing from 19.3 GW to 20.1 GW between quarter ends, alongside improved capacity utilization factors (CUFs).
The brokerage notes an improvement in merchant tariff rates, expecting an overall book realization increase of 3% QoQ to Rs 3.2 per kWh. Consolidated EBITDA is estimated to climb 32% YoY and 39% QoQ, reaching Rs 4,010 crore. Adjusted profit after tax (PAT) is projected to rise 46% YoY to Rs 1,060 crore. Despite the positive outlook, Emkay has set a target price of Rs 1,500 for Adani Green, indicating a potential 3-4% downside.
IndiGo (InterGlobe Aviation): Fuel Costs Impacting Profitability
IndiGo is expected to face considerable headwinds in Q1, primarily from elevated fuel costs exacerbated by the Middle East conflict. While yields are estimated to increase 14% YoY to Rs 5.70, supported by fuel surcharges and higher airfares, the sharp rise in crude oil prices and jet fuel cracks is forecast to push fuel cost per Available Seat Kilometer (ASK) up by 45% QoQ.
Airspace restrictions are likely to moderate ASK growth to 4% YoY, remaining flat QoQ. Passenger Load Factors (PLFs) are anticipated to improve by 40 basis points YoY to approximately 85%. Emkay forecasts a significant 56% YoY decline in Profit Before Tax (PBT) per ASK (excluding forex) and a net profit of Rs 1,150 crore, a substantial drop from Rs 2,160 crore reported a year ago. The target price for IndiGo is Rs 5,200, also suggesting a 3-4% potential downside.
Waaree Energies: Stable Margins Amidst Revenue Fluctuations
Waaree Energies is projected to report range-bound earnings with stable margins. Emkay Global estimates a 7% QoQ decline in consolidated revenue to Rs 7,860 crore, attributed to lower module production, a marginal dip in module realizations, and a reduced EPC (Engineering, Procurement, and Construction) run rate. However, on a YoY basis, revenue is expected to see a significant 78% increase.
EBITDA margin is forecast to remain stable QoQ at around 19%, bolstered by higher cell utilization and production. Consolidated EBITDA and adjusted PAT are estimated to fall 3% and 10% QoQ, respectively, to Rs 1,530 crore and Rs 950 crore. Interestingly, Emkay has set a target price of Rs 4,260 for Waaree Energies, hinting at a substantial 48% upside.
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