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Interglobe Aviation Ltd

| Quarterly Financial Results Q3 FY 2025-26

NEUTRAL SENTIMENT

Report Source

⬤22nd Jan 26

Summary : InterGlobe Aviation reported a profit for Q3 FY26, recovering from a prior quarter loss, but faced significant exceptional items from new labor codes, operational disruptions, and ongoing tax disputes.

Quarterly Report Analysis & Insights

Financial Disclosures

  1. Aircraft fuel expenses: Rs. 69,445 million (Q3 FY26 consolidated)
  2. Aircraft and engine rentals: Rs. 5,093 million (Q3 FY26 consolidated)
  3. Supplementary rentals and aircraft repair and maintenance (net): Rs. 33,853 million (Q3 FY26 consolidated)
  4. Airport fees and charges: Rs. 17,180 million (Q3 FY26 consolidated)
  5. Employee benefits expense: Rs. 21,027 million (Q3 FY26 consolidated)
  6. Finance costs: Rs. 15,452 million (Q3 FY26 consolidated)
  7. Depreciation and amortisation expense: Rs. 27,822 million (Q3 FY26 consolidated)
  8. Foreign exchange loss (net): Rs. 11,134 million (Q3 FY26 consolidated)
  9. Other expenses: Rs. 21,952 million (Q3 FY26 consolidated)
  10. Exceptional items: Rs. 15,465 million (Q3 FY26 consolidated)
  11. Revenue from operations: Rs. 234,719 million (Q3 FY26 consolidated)
  12. Other income: Rs. 10,687 million (Q3 FY26 consolidated)
  13. Bank guarantee of Rs. 500 million for DGCA ISRAS scheme.
  14. Tax exposure of Rs. 24,185 million (net of MAT recoverable written off) for income tax disallowances.
  15. Cumulative IGST paid under protest of Rs. 21,351 million on re-imported aircraft parts.
  16. Paid-up equity share capital: Rs. 3,866 million (as of Dec 31, 2025)
  17. Reserves excluding revaluation reserves: Rs. 89,818 million (as of March 31, 2025)
  18. Both unaudited standalone and consolidated financial results are presented.

Corporate Overview

  1. Impact from New Labour Codes on employee benefits (Rs. 9,693 million consolidated, Rs. 8,896 million standalone).
  2. Operational disruptions leading to flight cancellations, delays, and reduced passenger revenue (Rs. 5,772 million consolidated, Rs. 5,550 million standalone).
  3. DGCA imposed a penalty of Rs. 222 million for operational disruptions.
  4. Income tax disallowances and tax treatment of incentives, with a tax exposure of Rs. 24,185 million.
  5. Disputes regarding Integrated Goods and Services Tax (IGST) on re-import of repaired aircraft parts (Rs. 21,351 million paid under protest).
  6. Air transportation services
  7. Revenue from operations
  8. Other income

Risk Factors

  1. New Labour Codes impact profitability.
  2. Operational disruptions incurred penalties.
  3. Income tax disallowances remain disputed.
  4. IGST on re-imports still contested.

Key Drivers

  1. Profitability rebound from prior quarter.
  2. Operational stability measures implemented.
  3. Favorable court rulings on IGST.
  4. Strong internal audit re-appointment.

Auditor’s Report

  1. Unmodified conclusion on the unaudited consolidated and standalone financial results.

Board Commentary

  1. Mr. Amitabh Kant appointed as Additional Director (Non-Executive Non-Independent) effective September 15, 2025, approved by shareholders on December 6, 2025.
  2. Impact of New Labour Codes on employee benefits.
  3. Financial implications of operational disruptions and DGCA penalty.
  4. Tax exposure from income tax disallowances.
  5. Contingent liabilities related to IGST on re-imports.
  6. New Labour Codes implementation impacting employee benefits.
  7. DGCA penalty of Rs. 222 million due to operational disruptions.
  8. Income tax disallowances up to AY 2022-23, with appeals pending.
  9. IGST disputes on re-import of repaired aircraft parts, with appeals filed.

Corporate Governance

  1. Mr. Amitabh Kant appointed as Non-Executive Non-Independent Director.
  2. Audit Committee reviewed the financial results.

Management Discussion & Analysis

Future Strategy

  1. Monitoring developments and clarifications on New Labour Codes for appropriate accounting effect.
  2. Undertook measures to reboot network & systems and reposition crews to restore operations and improve stability.
  3. Committed to regulatory compliance and will assess further impact if needed.

Operational Focus Areas

  1. Restoring network and systems stability after disruptions.
  2. Ensuring regulatory compliance and monitoring developments.

Risk Control Measures

  1. Detailed assessment of New Labour Codes impact.
  2. Corrective actions taken to restore operational stability.
  3. Legal advice supports sustainability of ITAT orders on tax matters.
  4. Appeals filed against IGST demands, with favorable court orders received.

Critical Risks

  1. Financial impact from new Labour Codes.
  2. Operational disruptions and associated regulatory penalties.
  3. Unresolved income tax disallowances and tax exposure.
  4. Ongoing legal disputes regarding IGST on re-imported aircraft parts.