Interglobe Aviation – Indigo

A financial Analysis.

- a BASICS OF FINANCIAL MANAGEMENT assignment,

submitted to Mr. Ashok Bhansali, CA.

-Submitted by
Karthik K.A.
PRN: 19020343022
Division: ‘F’ | Batch of 2019- 21
Contents
• Horizontal Analyses of P&L statement and Balance sheet.
• Vertical Analyses of P&L statement and Balance sheet.
• Ratio Analysis .
• Analysis of financial statements.
• Analysis of financial ratios.
• Annexures.
 HORIZONTAL ANALYSES
Standalone Profit & Standalone Balance ------------------- in Rs. Cr. -------------------
------------------- in Rs. Cr. -------------------
Loss account Sheet
Mar '19 Mar '18 Change YoY Change in %
Mar '19 Mar '18 Change YoY Change in %

Sources Of Funds
Income
Total Share Capital 384.41 384.41 0.00 0.00
Sales Turnover 28,496.77 23,020.89 5,475.88 23.79 Equity Share Capital 384.41 384.41 0.00 0.00
Net Sales 28,496.77 23,020.89 5,475.88 23.79 Preference Share Capital 0 0 0.00
Other Income 1,324.94 946.86 378.08 39.93 Reserves 6,560.38 6,693.04 -132.66 -1.98
Stock Adjustments 0.66 -1.27 1.93 -151.97 Networth 6,944.79 7,077.45 -132.66 -1.87
Total Income 29,822.37 23,966.48 5,855.89 24.43 Secured Loans 2,193.67 2,241.37 -47.70 -2.13
Expenditure Total Debt 2,193.67 2,241.37 -47.70 -2.13
Raw Materials 139.8 327.54 -187.74 -57.32 Total Liabilities 9,138.46 9,318.82 -180.36 -1.94
Power & Fuel Cost 11,942.79 7,760.14 4,182.65 53.90 Mar '19 Mar '18

Employee Cost 3,137.79 2,455.02 682.77 27.81 Application Of Funds

Selling and Admin Expenses 0 0 0.00 Gross Block 5,685.67 5,790.56 -104.89 -1.81
Less: Accum. Depreciation 0 1,211.75 -1,211.75 -100.00
Miscellaneous Expenses 13,482.49 9,520.41 3,962.08 41.62 Net Block 5,685.67 4,578.81 1,106.86 24.17
Total Expenses 28,702.87 20,063.11 8,639.76 43.06 Capital Work in Progress 0 32.49 -32.49 -100.00
Investments 6,516.70 6,344.04 172.66 2.72
Mar '19 Mar '18 Inventories 211.44 183.23 28.21 15.40
Sundry Debtors 362.47 226.32 136.15 60.16
Cash and Bank Balance 8,606.36 6,580.60 2,025.76 30.78
PBDIT 1,119.50 3,903.37 -2,783.87 -71.32 Total Current Assets 9,180.27 6,990.15 2,190.12 31.33
Loans and Advances 3,629.10 3,183.86 445.24 13.98
Interest 508.96 339.82 169.14 49.77
PBDT 610.54 3,563.55 -2,953.01 -82.87 Total CA, Loans & Advances 12,809.37 10,174.01 2,635.36 25.90
Depreciation 759.58 436.88 322.70 73.86 Current Liabilities 15,436.09 11,510.39 3,925.70 34.11
Provisions 437.19 300.14 137.05 45.66
Profit Before Tax -149.04 3,126.67 -3,275.71 -104.77
Total CL & Provisions 15,873.28 11,810.53 4,062.75 34.40
Tax -305.18 884.3 -1,189.48 -134.51 Net Current Assets -3,063.91 -1,636.52 -1,427.39 87.22
Reported Net Profit 156.14 2,242.37 -2,086.23 -93.04 Total Assets 9,138.46 9,318.82 -180.36 -1.94
V Standalone Profit & Loss
Standalone Balance Sheet ------------------- in Rs. Cr. -------------------

E
------------------- in Rs. Cr. ------------------- Mar '19 Change in % Mar '18 Change in %
account

R Mar '19 Change in % Mar '18 Change in %

Sources Of Funds
Total Share Capital 384.41 4.2 384.41 4.1
T Income
Equity Share Capital
Preference Share Capital
384.41
0
4.2
0.0
384.41
0
4.1
0.0
I Sales Turnover 28,496.77 96 23,020.89 96 Reserves 6,560.38 71.8 6,693.04 71.8

C
Networth 6,944.79 76.0 7,077.45 75.9
Net Sales 28,496.77 96 23,020.89 96
Secured Loans 2,193.67 24.0 2,241.37 24.1
Other Income 1,324.94 4 946.86 4
A
Total Debt 2,193.67 24.0 2,241.37 24.1
Stock Adjustments 0.66 -1.27
Total Liabilities 9,138.46 100.0 9,318.82 100.0

L
Total Income 29,822.37 100 23,966.48 100
Expenditure Mar '19 Mar '18
Raw Materials 139.8 0.5 327.54 2 Application Of Funds
Power & Fuel Cost 11,942.79 42 7,760.14 39 Gross Block 5,685.67 62.2 5,790.56 62.1
A Employee Cost 3,137.79 11 2,455.02 12 Less: Accum. Depreciation
Net Block
0
5,685.67
0.0
62.2
1,211.75
4,578.81
13.0
49.1
N 0 0
Selling and Admin Expenses 0 0
Capital Work in Progress 0 0.00 32.49 0.35
Miscellaneous Expenses 13,482.49 47 9,520.41 47 Investments 6,516.70 71.3 6,344.04 68.1
A Total Expenses 28,702.87 100 20,063.11 100 Inventories 211.44 2.3 183.23 2.0

L
Sundry Debtors 362.47 4.0 226.32 2.4
Mar '19 Mar '18 Cash and Bank Balance 8,606.36 94.2 6,580.60 70.6

Y PBDIT 1,119.50 100 3,903.37 100 Total Current Assets 9,180.27 100.5 6,990.15 75.0
Interest 508.96 45 339.82 9 Loans and Advances 3,629.10 39.7 3,183.86 34.2

S PBDT 610.54 55 3,563.55 91 Total CA, Loans & Advances

Current Liabilities
12,809.37
15,436.09
140.2
168.9
10,174.01
11,510.39
109.2
123.5
68 11
E
Depreciation 759.58 436.88
Provisions 437.19 4.8 300.14 3.2
PBT (Post Extra-ord Items) -149.04 -13 3,126.67 80 Total CL & Provisions 15,873.28 173.7 11,810.53 126.7
S Tax
Reported Net Profit
305.18
-454.22
27
-41
884.3
2,242.37
23
57
Net Current Assets
Total Assets
-3,063.91
9,138.46
-33.5
100.0
-1,636.52
9,318.82
-17.6
100.0
ANALYSIS OF RATIOS
Consolidated Key Financial Ratios
--------- in Rs. Cr. ----------
of Interglobe Aviation
Mar-19 Mar-18
Profitability Ratios
Net Profit Margin (%) 0.55 9.74
Return on Networth/Equity (%) 2.26 31.68
Return on Capital Employed (%) 2.12 14.94
Return on Assets (%) 0.62 10.61
Asset Turnover Ratio (%) 113.86 108.95
Liquidity Ratios
Current Ratio (X) 2.26 2.39
Quick Ratio (X) 2.24 2.36
Inventory Turnover Ratio (X) 134.77 125.64
Valuation Ratios
Price/ Earning Ratio 276.39 22.84
Dividend payout ratio 12.32 1.03
Dividend yield ratio 0.04 0.05
Solvency Ratios
Debt/ Equity Ratio 5.7 5.8
Equity Ratio 0.042 0.041
Interest coverage ratio 2.2 11.5
Debt Ratio 0.2 0.2
ANALYSIS OF FINANCIAL STATEMENTS

The following insights have been derived from analysis of P&L statement and Balance sheet:

• Net increase in sales has been 24%, while next expenses has increased by 43%, leading to fall
in profits by 71%.
• Power and fuel cost have shot up by 53% and depreciation has hit 73%, thereby negatively
impacting assets and increasing operating expenses.
• Net share capital has stagnated; total debt has reduced by 2%. This could translate to the
airline facing difficulty in attracting investors both in the form of equity and debt.
• Sundry Debtors' account has increased by 60%, while inventories has risen by 15%. This
translates to the fact that the cash inflow is low.
• The interest rates have risen by 5 times from 9% to 45%, contributing to the huge losses to
the tune of 454 crore rupees.
ANALYSIS OF FINANCIAL RATIOS

Debt payability
• Although the YoY trend in Quick and current ratios is downward, they're still quite high for an
airline company, which shows that their short-term debts would be taken care of.
• An increase in the inventory turn over ratio from 125 to 137 shows that the long-term debt
payability of the company is also good.

Profitability
• based on YoY ratio analysis, we can see that the profitability of the company has hit rock
bottom; the overall loss of the company is 450 crores.

Market standing
• Equity ratio is showing a positive trend; this means that the investors believe in the company
and are willing to finance it with their investments.
• But the falling interest coverage ratio means that the company is burdened by debt expense.

NOTE: Additional information related to shares has been attached in Annexures.

Annexures
Please find below and attached the Per share data and the complete data sheet used for company analysis:

Per share data

(annualised)
Shares in issue (lakhs) 3844.07 3844.07
Earning Per Share (Rs) 4.06 58.33
Equity Dividend (%) 50 60
Book Value (Rs) 180.66 184.11
Market value (Rs) 1122.15 1332.15