โChallenging cost environmentโ: IndiGo pauses services to Hong Kong, Shanghai and 4 others
Earlier this week, IndiGo announced that it will temporarily pause flights to Manchester citing continued international airspace constraints.
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100 = ๊ธ์ ์ฐ์ธ
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Earlier this week, IndiGo announced that it will temporarily pause flights to Manchester citing continued international airspace constraints.
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Shares of Titagarh Rail Systems gained nearly 3% to hit the day's high of Rs 857 on the BSE on Wednesday after Wall Street major Jefferies raised the target price to Rs 990 from Rs 810, implying an upside of 19% from current market levels.With a Buy rating, the international brokerage raised the target by 23%. Jefferies said Titagarh Rail Systems delivered a stronger-than-expected quarter, and improving execution is likely to drive a re-rating of the stock going forward. The brokerage believes Titagarh is well-positioned to benefit from rising demand for passenger and metro coaches, supported by government-led infrastructure initiatives. It estimates a 44% EPS CAGR over FY26-30 and expects the company's strong order book in the passenger segment to provide healthy earnings visibility.Titagarh delivered 64 coaches in FY26, ahead of Jefferies' estimate of 60 coaches. While this fell short of the management's earlier guidance of 100-120 coaches, the shortfall was largely anticipated due to execution delays in the first half of FY26.Management has reiterated confidence in delivering 200-220 coaches in FY27, compared with Jefferies' estimate of 193 coaches, citing the resolution of initial execution challenges. On the flagship Vande Bharat project, the company expects to deliver two trains in FY27, in line with Jefferies' projections, with the prototype scheduled for supply in the December 2026 quarter.Margins in the March quarter came in significantly ahead of expectations at 19%, compared with Jefferies' estimate of 12%, supported by a sharp increase in execution of the Bengaluru Metro project, which is being executed as a job contract. Management has guided for margins of around 12% in the near term, with a gradual improvement towards 15% as the company advances up the technology value chain.Rail wagon sales declined 29% year-on-year due to supply-side constraints. While Jefferies expects wagon sales to fall a further 5% in FY27, it forecasts a largely stable trajectory over FY27-30, supported by its estimate that Indian Railways' cargo volumes could reach around 3 billion tonnes by FY35, compared with the FY30 target.The company currently has an order book of 6,500 wagons, providing visibility for about 97% of Jefferies' FY27 wagon sales estimates, although visibility beyond FY27 remains limited. Separately, Titagarh has secured 28% capital assistance for its brownfield shipbuilding expansion plans and is evaluating technology partnerships and potential joint ventures with shipyards.The brokerage noted that a recent report by Live Mint indicated Indian Railways is considering an order for 1 lakh wagons, which could significantly improve earnings visibility for wagon manufacturers. The valuation assigns 30x March 2028 estimated EPS to the core business, up from 25x previously, reflecting positive developments around potential wagon orders and the upcoming wheel joint venture, which it values at 2.5x its investment value. Key risks to the outlook include delays in wagon orders or wheel supplies from Indian Railways, as well as weaker-than-expected execution.Titagarh Rail Q4 snapshotTitagarh Rail reported a net profit for the quarter at Rs 53.96 crore, compared to a net loss of Rs 122.4 crore that the company reported last year.Titagarh Rail's revenue in the March quarter declined by 12.9% to Rs 875.4 crore from Rs 1,005.6 crore in the previous year.The company's earnings before interest, tax, depreciation and amortisation (EBITDA) declined 4.4% to Rs 97.3 crore in the March quarter from Rs 96.56 crore last year, while margins stood at 11% from 10% last year. (Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of The Economic Times)
Shares of InterGlobe Aviation, the operator of IndiGo, fell more than 1% to their day's low of Rs 4,425 on the BSE on Wednesday after it suspended flights to and from Manchester from August 31, as prolonged airspace restrictions and rising operational expenses continue to weigh on long-haul services.The airline said the temporary suspension will lead to the return of one of the six Boeing 787-9 Dreamliner aircraft leased from Norse Atlantic Airways, which were brought in to support its long-haul international expansion plans.In a statement issued on Tuesday, IndiGo said ongoing international airspace constraints have significantly increased flight durations, while a difficult cost environment has made operations on the route increasingly challenging. As a result, services between India and Manchester will be paused from August 31, 2026.The carrier had inducted six Boeing 787-9 Dreamliners on damp lease from Norse Atlantic Airways in early 2025 as part of its strategy to accelerate entry into European markets before the arrival of its own Airbus A350 aircraft. The Manchester service was among the first long-haul routes launched under this initiative.According to the airline, a combination of geopolitical tensions in the Middle East, elevated aviation turbine fuel (ATF) prices, severe airspace restrictions and currency volatility pushed operating costs well above original expectations.Abhijit Dasgupta, Senior Vice President for Network Planning and Revenue Management at IndiGo, said the route had received a strong response from passengers despite the operational difficulties."We inducted these wide-body aircraft on a short-term basis to fast-track our connectivity to high-potential long-haul destinations such as Manchester and witnessed very encouraging demand response," Dasgupta said."Unfortunately, longer flying times due to airspace constraints coupled with dramatically escalating costs compelled us to take the decision to temporarily discontinue our India-Manchester services," he added.The airline stressed that the suspension is only temporary and reaffirmed its commitment to growing its long-haul international network. Dasgupta said the positive customer response had strengthened IndiGo's confidence in the long-term viability of the Manchester route and its wider international expansion plans.IndiGo also said affected passengers will be notified in advance and assisted with alternative travel options or refunds, wherever applicable. The airline clarified that all of its other long-haul international services will continue to operate as scheduled.IndiGo Q4 snapshotIndiaโs leading airline by market share reported a net loss of Rs 2,536 crore for the fourth quarter of FY26, compared with a net profit of Rs 3,067 crore in the corresponding period last year. Revenue from operations, however, edged up 1% year-on-year to Rs 22,438 crore.The airline said its operational performance during the quarter was affected by disruptions linked to the ongoing conflict in the Middle East. Capacity, measured in available seat kilometres (ASKs), increased 3.4% year-on-year to 43.6 billion. IndiGo shares have fallen 20% in the last six months and about 17% in the last 1 year. Sensex, Nifty today: Catch all the LIVE stock market action here (Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of The Economic Times)
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