11:30 am Citi on IndiGo:
Citi has initiated its coverage on InterGlobe Aviation with a neutral rating and target price of Rs 1,300 apiece, given a 60 percent run-up in the stock from listing in November 2015. The stock gained 1.7 percent intraday Friday.
Reflecting decline in fuel prices (with Brent now sub USD 30 a barrel), combined with IndiGo’s competitive position, traffic growth prospects and A320neo orders, the brokerage believes InterGlobe can grow EBITDAR more than 27 percent in FY17.
IndiGo Airlines, the operating arm of InterGlobe Aviation, is a low-cost carrier (LCC) with a commanding 36 percent share of the domestic Indian market (November 2015). As the eighth-largest LCC globally, IndiGo operates a leased fleet of around 100 Airbus A320s, with an order for an additional 430 next-generation A320neos (offering 15%+ better fuel efficiency).
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11:00 am Market Check
The market erased early gains with the Sensex shedding more than 150 points from day’s high, dragged by banking & financials, FMCG and infra stocks.
The Sensex declined 82.83 points to 24690.14 and the Nifty fell 30.80 points to 7506.00. The market breadth also turned weak as about 1132 shares declined against 971 advancing shares on the Bombay Stock Exchange.
Hindustan Unilever dropped 1 percent ahead of its third quarter earnings. Numbers are likely to be tepid during the quarter with net profit down 14 percent year-on-year to Rs 1,073 crore. Revenue is seen rising 5.7 percent to Rs 8220 crore in same period.
US crude oil futures fell, heading lower after posting the first significant gains for 2016 in the previous session, as the prospect of additional Iranian supply looms over the market. West Texas Intermediate (WTI) was down 61 cents at USD 30.59 a barrel. On Thursday, the contract rose 72 cents, or 2.4 percent, to settle at USD 31.20. It hit a 12-year low of USD 29.93 earlier this week.