University of Mumbai

FINANCIAL RATIO ANALYSIS OF INTERGLOBE AVIATION &

SPICEJET
A Project Submitted to
University of Mumbai for partial completion of the degree
of
Master in Commerce
Under the Faculty of Commerce.
BY
DUBEY NEHA DINESH CHADRA

Under The Guidance Of

Ast. Prof. NEELAM PATIL

N.G ACHARYA COLLEGE AND D.K. MARATHE COLLEGE OF ARTS, COMMERCE

AND SCIENCE

AFFILIATED TO UNIVERSITY OF MUMBAI

N.G. ACHARYA MARG, CHEMBUR (EAST), MUMBAI-400024

1
 N.G. ACHARYA & D.K. MARATHE COLLEGE OF ARTS COMMERCE & SCIENCE.

(N.G. ACHARYA MARG, CHEMBUR (EAST), MUMBAI – 400071.

(NAAC – ACCREDITED-A)

CERTIFICATE
This is to certify that DUBEY NEHA DINESHCHADRA has worked and duly completed her Project
Work for
the degree of Master in Commerce (ACCOUNTING & FINANCE) under the Faculty of
Commerce and her project is entitled, “FINANCIAL RATIO ANALYSIS OF INTERGLOBE AVIATION &
SPICEJET”under supervision of Ast. Prof. NEELAM PATIL
. I further certify that the entire
work has been done by the learner under my guidance and that no part of it has been
submitted previously for any Degree or Diploma of any University.

It is her own work and facts reported by her findings and investigations.

Signature of Project Guidance Signature of Principal

Signature of Co-ordinator Signature of External Examiner

2
 ACKNOWLEDGEMNET
To list who all have helped me is difficult because they are so numerous and the depth is so
enormous. I would like to acknowledge the following as being idealistic channels and fresh
dimensions in the completion of this project.

I take this opportunity to thank the University Of Mumbai for giving me chance to do this
project.

I would like to thank my Principal, Prof. Dr. Vidya Gauri Lele for providing the
necessary facilities required for completion of this project.

I take this opportunity to thank our Coordinator Prof. Akhila Maheshwari, for his moral
support and guidance. I would also like to express my sincere gratitude towards my project
guide Ast. Prof. NEELAM PATIL whose guidance and care made the project successful

I would like to thank my College Library, for providing various reference books and
magazines related to my project.

Lastly, I would like to thank each and every person who directly and indirectly helped me
in the completion of the project especially my Parents and Peers who supported me
throughout my project.

3
 Declaration
I the undersigned Miss/Mr. DUBEY NEHA DINESHCHADRA here by declare that the

work embodied in this

project work titled “Financial Ratio Analysis of Interglobal Aviation (Indigo) and

Spicejet” forms my own contribution to the research work carried out under the guidance of

Ast. Prof. NEELAM PATIL is a result of my own research work and has not been previously

submitted to any other University for any other Degree/ Diploma to this or any other

University. Wherever reference has been made to previous works of others, it has been

clearly indicated as such and included in the bibliography. I, here by further declare that all

information of this document has been obtained and presented in accordance with

academic rules and ethical conduct.

DUBEY NEHA DINESHCHADRA

Name and Signature of Learner

Certified by,

Name and signature of the Guiding Teacher

4
 INDEX
CHAPTER NO. TITLE OF CHAPTER PAGE NO
Introduction:

1 • Meaning and definition

• Importance of financial ratio analysis
• Objective of ratio analysis. 9
• Features and characteristic of ratio analysis.

Research and methodology:

• Advantages of ratio analysis. 10-22
2 • Disadvantages
• Merits and demerits
• Types of financial ratio

Literature Review:
• Inter globe aviation limited
3 • Company overview 23-41
• Industry overview
• Business overview
• SWOT analysis of indigo aviation
• History of space jet airline

Data Analysis Interpretation and Presentation:

• Capital structure of Interglobal aviation

4 • Capital structure of space jet 42-67
• Key financial ratio
• Profitability ratio
• Liquid ratio
• Valuation ratio
• Financial statement

Peer comparison:

5 • Comparison 68-77
• Valuation
• Financial
• Share holding

6 Conclusion : 78-82

7 Bibliography : 83

5
 INTRODUCTION

Meaning of Ratio Analysis

Ratio analysis is a quantitative method of gaining insight into a company's liquidity, operational
efficiency, and profitability by studying its financial statements such as the balance sheet and
income statement. Ratio analysis is a cornerstone of fundamental equity analysis.

What is Ratio Analysis?

Corporate finance ratios are quantitative measures that are used to assess businesses. These
ratios are used by financial analysts, equity research analysts, investors, and asset managers to
evaluate the overall financial health of businesses, with the end goal of making better investment
decisions. Corporate finance ratios are also heavily used by financial managers and C-suite
officers to get a better understanding of how their businesses are performing

Definition of Ratio Analysis

According to Khan and Jain define the term ratio analysis as -“The systematic use of ratios to
interpret the financial statements so that the strengths and weaknesses of a firm as well as its
historical performance and current financial conditions can be determined.”

Importance of Financial Ratio Analysis:-

Now that you know financial ratio definition analysis, let’s look at the importance of this all-
essential analysis. With the help of financial ratio analysis, you can

• Understand the profitability of a company:-

Profitability financial ratios help determine how profitable a firm is. With this ratio analysis of a
company, you can understand the ability of the firm to generate earnings. To put it otherwise,
with this ratio, you can find out how well the company is using investors’ money

6
• Analyse operational efficiency of a firm:-
With certain financial ratios such as account receivables turnover, fixed asset turnover and
inventory turnover ratio, you can find out the degree of efficiency of a firm. You can use these
ratios to compare two different industries in the same domain to find out which company is
better managed compared to the other

• Find out about a firm’s liquidity:-

Liquidity refers to whether a company can pay its short-term obligations or not. Through
liquidity financial ratios such as current ratio, quick ratio and cash ratio, among others, you can
determine whether the company is in a position to meet outstanding expenses, salary due, tax
payable, so on.

• HELP IDENTIFY BUSINESS RISK OF A FIRM:-

This is another significance of ratio analysis. Through financial leverage and operating
leverage, you can understand how sensitive is the company’s profitability with respect to its
debt outstanding and fixed cost deployment.

Apart from these, financial ratio analysis aid in identifying financial risks of a company and
understanding future prospects

7
 Objectives of Ratio Analysis:-

Ratio analysis serves the purpose of various users who are interested in the financial
statements. It simplifies summaries and systematizes the figures in the financial statements.

Objectives of Ratio Analysis are:

• Simplify accounting information.

• Determine liquidity or Short-term solvency and Long-term solvency.

• Short-term solvency is the ability of the enterprise to meet its short-term financial obligations.
Whereas, Long-term solvency is the ability of the enterprise to pay its long-term liabilities of the
business.

• Assess the operating efficiency of the business.

• Analyse the profitability of the business.

• Help in comparative analysis, i.e. inter-firm and intra-firm comparisons.

• Ratio analysis will help validate or disprove the financing, investment and operating decisions of
the firm. They summarize the financial statement into comparative figures, thus helping the
management to compare and evaluate the financial position of the firm and the results of their
decisions.

Feature/Characteristics of ratio Analysis:

What are the features of the five categories of financial ratios?

Ratio analysis consists of calculating financial performance using five basic types of ratios:
profitability, liquidity, activity, debt, and markets

What are the characteristics of ratio analysis?

It simplifies complex accounting statements and financial data into simple ratios
of operating efficiency, financial efficiency, solvency, long-term positions etc. Ratio analysis
help identify problem areas and bring the attention of the management to such areas.

Financial ratios, which compare one value in relation to another value over a 12 month
period, are computed using information from a company's financial statements. Ratios can
identify various financial attributes of a company, such as solvency and liquidity, profitability
(quality of income), and return on equity

8
Uses and Users of Financial Ratio Analysis

Why use Ratio Analysis?

Ratio analysis is a great way to compare two companies that are different in size operations and
management style. It also is a great way to quantify how efficient a company’s operations are
and
how profitable the business is set up to be. Solvency ratios, for example, can be used to analyse
how well a company will be able to meet their financial obligations

Analysis of financial ratios serves two main purposes:

1. Track company performance
Determining individual financial ratios per period and tracking the change in their values over
time is done to spot trends that may be developing in a company. For example, an increasing
debt-to-asset ratio may indicate that a company is overburdened with debt and may eventually be
facing default risk.

2. Make comparative judgments regarding company performance

Comparing financial ratios with that of major competitors is done to identify whether a company
is performing better or worse than the industry average. For example, comparing the return on
assets between companies helps an analyst or investor to determine which company is making
the most efficient use of its assets.

Users of financial ratios include parties external and internal to the company:

External users: Financial analysts, retail investors, creditors, competitors, tax authorities,
regulatory authorities, and industry observers
Internal users: Management team, employees, and owners

9
 Research and Methodology
Advantages of Ratio Analysis

Ratio analysis is a very important technique of analysing financial strength and weaknesses
of an organisation.
The advantages of ratio analysis is given below:
(i) Analytical Ability:
The financial ability of an organisation can be judged through ratio analysis. Solvency,
profitability, liquidity, etc., can be analysed with the help of ratios. Weakness can be sorted out
and remedial measures can be taken.
(ii) Inter-firm Comparison:
With the help of ratio inter-firm comparison under the same management or with the competitors
can be judged. Solvency, liquidity, profitability, efficiency, etc., can be compared within the
same industry or with outsiders.
(iii) Measurement of Long-term Solvency Position:
With the help of ratio analysis, an analyst may determine the long-term debt paying capacity of a
firm. Those who are long-term investors of the firm say Creditors, Debenture holders, Bank, etc.,
can take the decision wisely whether to invest in the firm or not.
(iv) Measurement of Profitability:
Ratio analysis helps to determine the earning capacity or profitability of a firm. Moreover, trends
or variation in profitability over the years can also be judged with the help of ratio analysis.
(v) Measurement of Liquidity Position:
The liquidity position of a firm can also be determined with the help of ratio analysis. Here
liquidity means short-term debt repayment capacity. With the help of current ratio, liquid ratio,
etc., creditors, financial institutions, etc., can take decisions regarding granting of short-term
credit.

Assist in Decision-making:

10
Overall efficiency of an organisation can be judged with the help of ratio analysis. Management
can make valuable decisions on the basis of computed ratios.
(vi) Managerial Efficiency Regarding Utilisation of Assets:
With the help of ratio analysis the managerial efficiency regarding utilisation of different assets
can be determined.
(vii) Assist in Controlling:
Ratio analysis is a very useful tool for controlling the financial activities of a firm. For this
purpose different expense ratios are calculated for different years and help the top management
aware to control the specific areas.

Disadvantage of Ratio Analysis

The following are the disadvantages of ratios analysis:

(i) Ratio analysis can lead to wrong conclusions because of inconsistency in the financial records
of different periods.
(ii) It is generally based on historical figures and is, therefore, a post-mortem only.
(iii) It is based on rough and ready figures and, therefore, it is not accurate.
(iv) The figures by themselves do not give a full background but they are broad indicators. It
becomes, therefore, necessary to scrutinize further details in order to ascertain the cause of the
several indications shown by ratio analysis.
(v) Accounting ratios may be worked out for any two figures even if they are not significantly
related.
(vi) A little window-dressing may have been reported by some organisations to boost up ratios
and give the better picture of the financial position. Thus, the ratio analysis may lead to wrong
conclusions.

Merits/Demerits of Ratio Analysis

Merits of Ratio Analysis are as follows:

11
i. Ratios make it more convenient to estimate other figures when one figure is known.
ii. Investment decisions are based on ratio analysis.
iii. They act as an index or parameter of efficiency of the firm or Organizations.
iv. It is one type of tool management
v. It simplifies many complicated financial statements.
vi. It highlights the weakness of the enterprise.
vii. It provides more analysis information to the management for decision making and controlling
purposes.

Demerits of Ratio Analysis

Ratios are exceptionally useful tools. However, they should be used with extreme care and
considered judgement because they suffer from certain serious drawbacks.

Some of demerits of ratio analysis are listed below:

i. Ratios can sometimes be misleading if an analyst does not know the reliability and soundness of
the figures from which they are computed and the financial position of the business at other
times of the year.
ii. A business enterprise, for example, may have an acceptable current ratio of 3:1 but a larger part
of the accounts receivable comprising a great portion of the current assets may be uncollectible
and of no value. When these are deducted, the ratio might be 2:1.
iii. The mechanics of ratio construction are not as important as the proper interpretation of the
ratios. As a matter of fact, ratios are only a preliminary step in interpretation. They call attention
to certain aspects of the business which need detailed investigation before arriving at any final
conclusion.
iv. Ratios can never be the substitute of raw figures. At the time of interpretation, therefore, raw
figures should also be referred to.
v. Intercompany comparison on the basis of ratio analysis is distorted because of the differing
practices followed by different companies in respect of allocation of the cost of fixed assets and
inventory utilisation as also of the selling and intangible costs between different time periods
Unless there is consistency in adoption of accounting methods, ratio may not prove to be of
greater use.
vi. Price level changes render ratio analysis difficult.

Major Limitations of Ratio Analysis

12
Though ratio analysis gives different benefits to an organisation and also to the different outside
users still this is not free from limitations.

The limitations of ratio analysis are discussed below:

(i) Only Based on Comparison:
Only calculating a single ratio cannot give a meaningful analysis unless it is compared with
another ratio also. For example, calculating current ratio itself cannot give any concrete findings
regarding solvency of a firm unless some other ratio like quick or absolute quick ratios are
analyzed together to give some conclusion.

Hence, comparison is only one of the techniques for finding some result but other tests also have
influence to give some conclusions which are absent in ratio analysis.

(ii) Post-mortem Examination:

Ratio analysis is made on the basis of some past financial statements, i.e., this analysis is purely
historical and has no ability to predict the future. Moreover, ratio analysis only helps the
management to find out trends of a particular item but cannot prove it.

(iii) Uniform Accounting Principles:

Inter-firm comparison through ratio analysis cannot give a real picture regarding strengths and
weaknesses, unless there are uniform accounting principles maintained by the other firms under
the same group or by the competing firm.

For example, one firm follows the cost price of stock valuation and another firm follows cost or
market price, whichever is lower. Definitely stock turnover ratio will give misleading results.

(iv) Problem in Fixing of Standards:

One of the tools of ratio analysis is to compare the actual result with the standards. But in reality
fixing the standard is a very tough task for the analyst and this standard may also vary from
industry-to-industry.

The standard ratio once decided for the industry is not rigid and may change over time. Hence,
fixing standards for all the ratios is really a very hard task for different situations.

(v) Limitations of Financial Statements:

Financial statements are the sources of calculating ratios. But a financial statement has its many
limitations. Ratios calculated on the basis of these statements give misleading results unless
some adjustment is made.

13
(vi) Personal Influence:
Interpreters must have a sound knowledge and analytical ability for calculating ratios. Often it is
seen, the interpreter applies his personal influence while determining ratios for different
purposes. This may give a misleading result and be valueless for the firm.

(vii) Only Quantitative Measurement:

Ratios are calculated on the basis of two numerical figures and hence quantitative and not
qualitative. Only quantitative analysis may give misleading results in different matters.
For example, a high current ratio indicates the favourable loan repayment capacity of the firm,
but it may happen the ratio is high due to huge accumulation of inventory in the current asset.
Hence, even if the current ratio is high that only gives quantitative proof but not qualitative.

Types of Financial Ratio Analysis

14
Liquidity Ratio Analysis
The first type of financial ratio analysis is the Liquidy Ratio. The liquidity ratio aim is to
determine the ability of a business to meet its financial obligations during the short-term and to
maintain its short-term debt paying ability. Liquidity ratio can be calculated by multiple ways
they are as follows:-

1 – Current Ratio
The Current ratio is referred to as a working capital ratio or banker’s ratio. The current ratio
expresses the relationship of a current asset to current liabilities.
Formula = Current Assets / Current Liabilities
A company’s current ratio can be compared with the past current ratio; this will help to
determine if the current ratio is high or low at this period in time.
The ratio of 1 is considered to be ideal that is current assets are twice a current liability, then no
issue will be in repaying liability, and if the ratio is less than 2, repayment of liability will be
difficult and work effects.

2 – Acid Test Ratio/ Quick Ratio

The current ratio is generally used to evaluate an enterprise’s overall short-term solvency or
liquidity position, but many times it is desirable to know the more immediate position or instant
debt paying ability of a firm than that indicated by the current ratio for this acid test financial
ratio is used. It is relating the most liquid assets to current liabilities.
Acid Test Formula = (Current Assets -Inventory) (Current Liability)

15
The quick ratio can be written as:-
Quick Ratio Formula = Quick Assets / Current Liabilities
Or
Quick Ratio Formula = Quick Assets / Quick Liabilities

3 – Absolute Liquidity Ratio

Absolute Liquidity helps to calculate actual liquidity, and for that, inventory and receivables are
excluded from current assets. For a better view of liquidity, some assets are excluded that may
not represent current cash flow. Ideally, the ratio should be 1:2.
Absolute Liquidity = Cash + Marketable Securities + Net Receivable and Debtor

4 – Cash Ratio
The Cash ratio is useful for a company that is undergoing is financial trouble.
Cash Ratio Formula = Cash + Marketable Securities / Current Liability
If the ratio is high, then it reflects the underutilization of resources, and if the ratio is low, then it
can lead to a problem in repayment of bills.

Turnover Ratio Analysis

The second type of financial ratio analysis is the Turnover Ratio. The turnover ratio is also
known as activity ratio. This type of ratio indicates the efficiency with which an enterprise’s
resources are utilized. For each asset type, the financial ratio can be calculated separately.
The following are financial ratios commonly calculated:-

5 – Inventory Turnover Ratio

This financial ratio measures the relative size of inventory and influences the amount of cash
available to pay liabilities.
Inventory Turnover Ratio Formula = Cost of Goods Sold / Average Inventory

6 – Debtors or Receivable Turnover Ratio

The receivable turnover ratio shows how many times the receivable was turned into cash during
the period.
Receivable Turnover Ratio Formula = Net Credit Sales / Average Accounts Receivable

7 – Capital Turnover Ratio

The capital turnover ratio measures the effectiveness with which a firm uses its financial
resources.
Capital Turnover Ratio Formula = Net Sales (Cost of Goods Sold) / Capital Employed

16
8 – Asset Turnover Ratio
This financial ratio reveals the number of times the net tangible assets are turned over during a
year. The higher the ratio better it is.
Asset Turnover Ratio Formula = Turnover / Net Tangible Assets

9 – Net Working Capital Turnover Ratio

This financial ratio indicates whether or not working capital has been effectively utilized in
making sales. Net Working capital signifies the excess of current assets over current liabilities.
Net Working Capital Turnover Ratio Formula = Net Sales / Net Working Capital

10 – Cash Conversion Cycle

The Cash conversion cycle is the total time taken by the firm to convert its cash outflows into
cash inflows (returns).
Cash Conversion Cycle Formula = Receivable Days + Inventory Days – Payable Days
Operating Profitability Ratio Analysis
The third type of financial ratio analysis is the Operating Profitability Ratio. The profitability
ratio helps to measure the profitability of a company through this efficiency of business activity.
The following are the important profitability ratios:-

11 – Earning Margin
It is the ratio of net income to turnover express in percentage. It refers to the final net profit used.
Earning Margin formula = Net Income / Turnover * 100

12 – Return on Capital Employed or Return On the Investment

This financial ratio measures profitability in relation to the total capital employed in a business
enterprise.
Return on Investment formula = Profit Before Interest and Tax / Total Capital Employed

13 – Return On Equity
Return on equity is derived by taking net income and dividing it by shareholder’s equity; it
provides a return that management is realizing from the shareholder’s equity.
Return on Equity Formula = Profit After Taxation – Preference Dividends / Ordinary
Shareholder’s Fund * 100

14 – Earnings Per Share

EPS is derived by dividing the profit of the company by the total number of shares outstanding.
It means profit or net earnings.
Earnings Per Share Formula = Earnings After Taxation – Preference Dividends / Number
of Ordinary Shares

17
The investor uses all the above ratio before investing and make maximum profit and analyze
risk. Through ratio, it is easy for him to compare and predict the future growth of a company. It
also simplifies the financial statement.

Business Risk Ratios

The fourth type of financial ratio analysis is the Business Risk Ratios. Here we measure how
sensitive is the company’s earnings with respect to its fixed costs as well as the assumed debt on
the balance sheet.

15 – Operating Leverage
Operating leverage is the percentage change in operating profit relative to sales, and it
measures how sensitive the operating income is to the change in revenues. Greater the use
of fixed costs, the greater the impact of a change in sales on the operating income of a company.
Operating Leverage Formula = % change in EBIT / % change in Sales

16 – Financial Leverage
Financial leverage is the percentage change in Net profit relative to Operating Profit, and it
measures how sensitive the Net Income is to the change in Operating Income. Financial leverage
primarily originates from the company’s financing decisions (usage of debt).
Financial Leverage formula = % change in Net Income / % change in EBIT

17 – Total Leverage
Total leverage is the percentage change in Net profit relative to its Sales. Total leverage
measures how sensitive the Net Income is to the change in Sales.
Total Leverage Formula = % change in Net Profit / % change in Sales
Financial Risk Ratio Analysis
The fifth type of financial ratio analysis is the Financial Risk Ratio. Here we measure how
leveraged the company is and how it is placed with respect to its debt repayment capacity.

18 – Debt Equity Ratio

Debt Equity Formula = Long Term Debts / Shareholder’s Fund
It helps to measures the extent of equity to repay debt. It is used for long-term calculation.

19 – Interest Coverage Ratio Analysis

This financial ratio signifies the ability of the firm to pay interest on the assumed debt.
Interest Coverage Formula = EBITDA / Interest Expense
Higher interest coverage ratios imply the greater ability of the firm to pay off its interests.
If Interest coverage is less than 1, then EBITDA is not sufficient to pay off interest, which
implies finding other ways to arrange funds.

20 – Debt Service Coverage Ratio (DSCR)

18
Debt Service Coverage Ratio tells us whether the Operating Income is sufficient to pay off all
obligations that are related to debt in a year.
Debt Service Coverage Formula = Operating Income / Debt Service
Operating Income is nothing but EBIT
Debt Service is Principal Payments + Interest Payments + Lease Payments
A DSCR of less than 1.0 implies that the operating cash flows are not sufficient enough for Debt
Servicing, implying negative cash flows.

Stability Ratios
The sixth type of financial ratio analysis is the Stability Ratio. The stability ratio is used with a
vision of the long-term. It uses to check whether the company is stable in the long run or not.
This type of ratio analysis can be calculated by multiple ways they are as follows:-

21 – Fixed Asset Ratio

This ratio is used to know whether the company is having sufficient fun or not to meet the long-
term business requirement.
Fixed Asset Ratio Formula = Fixed Assets / Capital Employed
The ideal ratio is 0.67. If the ratio is less than 1 then it can be used to purchase fixed assets.
22 – Ratio to Current Assets to Fixed Assets
Ratio to Current Assets to Fixed Assets = Current Assets / Fixed Assets
If ratio increases, profit increase and reflect business is expanding, whereas if ratio decreases
means trading is loose.
23 – Proprietary Ratio
The proprietary ratio is the ratio of shareholder funds upon total tangible assets; it tells about the
financial strength of a company. Ideally, the ratio should be 1:3.
Proprietary Ratio Formula = Shareholder Fund / Total Tangible Assets

Coverage Ratios
The seventh type of financial ratio analysis is the coverage Ratio. This type of ratio analysis is
used to calculate dividend, which needs to be paid to investors or interest to be paid to the
lender. The higher the cover, the better it is. It can be calculated by the below ways:-
24 – Fixed Interest Cover
It is used to measure business profitability and its ability to repay the loan.
Fixed Interest Cover Formula = Net Profit Before Interest and Tax / Interest Charge

25 – Fixed Dividend Cover

It helps to measure dividend need to pay to the investor.

19
Fixed Dividend Cover Formula = Net Profit Before Interest and Tax / Dividend on
Preference Share

Control Ratio Analysis

The eighth type of financial ratio analysis is the Control Ratio. Control ratio from the name
itself, it is clear that its use to control things by management. This type of ratio analysis helps
management to check favourable or unfavourable performance.

26 – Capacity Ratio
For this type of ratio analysis, the formula given below will be used for the same.
Capacity Ratio Formula = Actual Hour Worked / Budgeted Hour * 100

27 – Activity Ratio
To calculate a measure of activity below, the formula is used.
Activity Ratio Formula = Standard Hours for Actual Production / Budgeted Standard
Hour * 100

28 – Efficiency Ratio
To calculate productivity below formula is used.
Efficiency Ratio Formula = Standard Hours for Actual Production / Actual Hour Worked
* 100
If a percentage is 100 or more, it is considered to be as favorable; if a percentage is less than
100%, then it is unfavorable.

29 - Investment Ratios
A ratio showing the amount of investment expressed in relation to profit, costs, etc., and used to
assess financial performance; (Economics) one showing the amount a country invests in fixed
capital, expressed as gross capital formation divided by GDP, and used to indicate potential for
growth.
Types Of Investment Ratios
There are five basic ratios that are often used to pick stocks for investment portfolios. These
include price-earnings (P/E), earnings per share, debt-to-equity and return on equity
(ROE).

Price-earnings (P/E),
The price-to-earnings ratio (P/E ratio) is the ratio for valuing a company that measures its
current share price relative to its earnings per share (EPS). The price-to-earnings ratio is also
sometimes known as the price multiple or the earnings multiple.
P/E ratios are used by investors and analysts to determine the relative value of a company's
shares in an apples-to-apples comparison. It can also be used to compare a company against its
own historical record or to compare aggregate markets against one another or over t

20
 Earnings per share (EPS)
Earnings per share (EPS) is calculated as a company's profit divided by the outstanding shares
of its common stock. The resulting number serves as an indicator of a company's profitability. It
is common for a company to report EPS that is adjusted for extraordinary items and potential
share dilution.
The higher a company's EPS, the more profitable it is considered to be.

• Earnings per share (EPS) is a company's net profit divided by the number of common shares it
has outstanding.
• EPS indicates how much money a company makes for each share of its stock and is a widely used
metric for estimating corporate value.
• A higher EPS indicates greater value because investors will pay more for a company's shares if
they think the company has higher profits relative to its share price.
• EPS can be arrived at in several forms, such as excluding extraordinary items or discontinued
operations, or on a diluted basis.

Debt-to-Equity (D/E) Ratio

The debt-to-equity (D/E) ratio is used to evaluate a company's financial leverage and is
calculated by dividing a company’s total liabilities by its shareholder equity. The D/E ratio is an
important metric used in corporate finance. It is a measure of the degree to which a company is
financing its operations through debt versus wholly owned funds. More specifically, it reflects
the ability of shareholder equity to cover all outstanding debts in the event of a business
downturn. The debt-to-equity ratio is a particular type of gearing ratio.

• The debt-to-equity (D/E) ratio compares a company’s total liabilities to its shareholder equity
and can be used to evaluate how much leverage a company is using.
• Higher-leverage ratios tend to indicate a company or stock with higher risk to shareholders.
• However, the D/E ratio is difficult to compare across industry groups where ideal amounts of
debt will vary.
• Investors will often modify the D/E ratio to focus on long-term debt only because the risks
associated with long-term liabilities are different than short-term debt and payables.

Return on Equity (ROE)

Return on equity (ROE) is a measure of financial performance calculated by dividing net
income by shareholders' equity. Because shareholders' equity is equal to a company’s assets
minus its debt, ROE is considered the return on net assets. ROE is considered a gauge of a
corporation's profitability and how efficient it is in generating profits.

• Return on equity (ROE) is the measure of a company's net income divided by its shareholders'
equity.
• ROE is a gauge of a corporation's profitability and how efficiently it generates those profits.
• An ROE is considered satisfactory based on industry standards, though a ratio near the long-
term average of the S&P 500 of around 14% is typically considered acceptable.

21
22
 Literature Review
InterGlobe (IndiGo) Aviation Ltd

OWNER OF INTERGLOBE (INDIGO) AVIATION

The airline was founded as a private company by Rahul Bhatia of InterGlobe
Enterprises and Rakesh Gangwal, in 2006. InterGlobe had a 51.12% stake in
IndiGo, while 47.88% was held by Gangwal's
CEO OF INTERGLOBE(IndiGo)
Ronojoy Dutta
Chairman & [Link]
Meleveetil Damodaran

Independent Director
Pallavi Shardul Shroff
Venkataramani Sumantran
Anupam Khanna

Ownership and structure

Interglobe Aviation Limited is publicly traded under NSE: INDIGO, with a market
capitalization of about $9.28 B as of 2023
Headquarter
IndiGo is headquartered in Gurugram, Haryana, India
Registered Office Address
Upper Ground Floor, Thapar House, Gate No. 2 Western Wing, 124 Janpath,
New Delhi 110001
Email

23
investors@[Link]

Internet
[Link]

Registrars Address
Selenium Tower B, Plot No. 31-32, Gachibowli, Financial District, Nanakramguda,Seri
Hyderabad, Telangana, 500032

Email
[Link]@[Link]
Internet
[Link]

Company Overview
InterGlobe Aviation Ltd (IndiGo) is (NSE: INDIGO) India’s largest passenger airline with a
market share of 54.3% as of January 2023

. The company's journey began in August 2006 on thefoundation of three pillars – offering low
fares, being on-time, and delivering a courteous and hassle-free experience. Today, IndiGo has
become synonymous with affordability, punctuality, and reliability. 1
With a fleet of 280 aircraft and growing, the company connect people across the globe to a
network of over 91 destinations worldwide. A uniform fleet for each type of operation, high
operational reliability and award-winning service make it one of the most reliable airlines in the
world. Flying to 67 Destinations in India and 24 Internationally.
IndiGo is not only the most efficient low fare operator domestically but is also comparable with
global low cost airlines. IndiGo is constantly enhancing its engagement with its passengers to
augment their travel experience. From multichannel direct sales (including online flight booking,
call centers and airport counters), to online flight status checking, an exclusive IndiGo app for
Android, IndiGo has transformed air travel in India. Today, IndiGo is India’s most preferred
airline. At IndiGo, low fares come with high quality.
Since 1989, InterGlobe Enterprises has been bridging gaps between people and markets. The
company's unswerving commitment to this purpose has allowed it to establish a strong foothold
in businesses such as civil aviation, hospitality, travel commerce, airline management, aircraft
maintenance engineering, and advanced pilot training.
Over the past three decades, IndiGo has continued to expand its vision and become India’s
leading and one of the most respected conglomerates. Headquartered in Gurugram and driven by
a workforce of over 24,000 people spread across 27+ countries and 100+ cities globally, its
passion for quality, value and innovation is set to power it into the future.

24
Industry Overview
Given the global nature of the COVID-19 pandemic that threatens to throw many economies into
recession, it could take passenger air travel demand anywhere from several months to several
years to recover to 2019 levels. This return to normalcy in airline travel will depend on multiple
factors including the speed of virus containment, lifting of country border closures, restoration of
confidence in air travel, and a return to normal economic and social activity.
After rapid expansion over the last decade when Indian aviation registered a Compound Annual
Growth Rate (“CAGR”) of around 13.6% in domestic demand measured in terms of Revenue
Passenger Kilometers (“RPKs”), it slowed down to 5% in 2019. The deceleration in growth was
primarily driven by supply-side constraints due to industry consolidation subsequent to the
cessation of operations of Jet Airways. Adding significantly to industry headwinds, COVID-19
hit the aviation Industry in Q4 FY 2020. In response to the virus, the Government banned
international flights with effect from March 22, 2020 and domestic flights with effect from
March 25, 2020. Even before these extraordinary measures were taken, the travel demand started
to slow down significantly. This had a major impact on the financial performance of the Indian
carriers.
In the medium to long term, once the crisis is over, the demand outlook for aviation remains
very strong in India largely driven by under-penetration, rise in working population and
expansion of middle class. (Refer to the section below for key growth highlights in the Indian
aviation during the pre-pandemic period.) Furthermore, the rise in trade and tourism is also
likely to boost the industry. Based on the recent data published by the Civil Aviation
Administration of China (“CAAC’”), daily flights in China have recovered by 43% as of April
21, 2020 as compared to March 2020. Thus, although the COVID-19 outbreak will have a near-
term negative impact, aviation in India should gradually recover and get back on track for rapid
growth.
Moreover, India’s exports and imports have been growing strongly over the past decade. Growth
in trade augurs well for the aviation industry as they handle about 30% of India’s total trade by
value. Cargo has also seen a rising demand over the last few years. For example, during FY
2006-2019, domestic freight traffic increased at a CAGR of 8.3%, while international freight
traffic grew at a CAGR of 6.9% during the same period. As per IBEF, by 2023, total freight
traffic is expected to touch 4.14 million tonnes exhibiting growth at a CAGR of 7.3% between
FY 2016 and FY 2023. International freight traffic is expected to grow at a CAGR of 7.1% while
domestic freight traffic is expected to grow at a CAGR 7.5% between FY 2016 and FY 2023.
The share of travel and tourism in India’s GDP was 10.4% in 2018. Indian economy and the
aviation industry have a symbiotic relationship and each benefit immensely with the growth of
other. While the fast-paced growth of the aviation industry over the past decade can be largely
attributed to the robust economic growth, economic growth has also been greatly benefitted by
the growth in aviation industry. According to International Civil Aviation Organization
(“ICAO”), for every $100 of output produced and every 100 jobs generated by air transport, an
additional demand of around $325 and 610 jobs are triggered in other industries, globally. The
aviation industry is further expected to increase its share in the Gross Domestic Product and help
the economy by creating jobs and an increase in production through trade and tourism.

25
Business Overview
IndiGo commenced operations in August 2006 with a single aircraft and has grown its fleet to
262 aircraft as of March 31, 2020. The company had placed an order of 430 fuel-efficient A320
NEO family aircraft in 2011 and 2015, of which 114 have been delivered as of March 31, 2020.
In addition to this, in October 2019, the company placed an additional firm order for the 300
A320 NEO family aircraft, which includes A321 XLRs in addition to A320 NEOs and A321
NEOs.
At the end of March 2020, the company had 100 fuel-efficient A320 NEOs giving it 15% lower
fuel burn compared to the current generation of A320 CEOs without sharklets. The company
also have 14 A321 NEOs in its fleet with higher seating capacity, lower unit costs and longer
range compared to A320 NEOs. The company had placed an order with Pratt & Whitney to
power 150 of its A320 NEO family aircraft. All the A320 NEO family aircraft that IndiGo has
today use the Pratt & Whitney GTF engine. In addition to this, in June 2019, the company placed
an order with CFM to provide engines for 280 of its NEO aircraft. With this order, IndiGo has
identified its engine partner for the initial 430 A320 NEO family order.
In FY 2020, the company was awarded the ‘Best Low-Cost Airline in Central Asia and India’
for the tenth consecutive time at the Skytrax World Airline Awards 2019. The company is
ranked as one of the best airlines in terms of on-time performance for the third consecutive year
amongst the top 20 global mega-airlines based on data compiled by the OAG. IndiGo is the only
Indian carrier to have made it to this list, three years in a row.
IndiGo has been recognised among the most valuable and strongest airline brands, as per the
Brand Finance Airlines 50 report for 2020. Further, the company was also awarded the ‘Safety
Partner - Best Aircraft Turn Around Activity’ by DIAL; the ‘Best Domestic Airline’ at FICCI’s
first edition of Travel and Tourism Excellence Awards; and the ‘Companies with Great
Managers Award’ by People Business in partnership with The Economic Times. These awards
are a testimony to its best-in-class service quality. The company’s learning academy ‘ifly’ also
won awards for best practices in Learning and Development under six different categories at the
TISS LEAPVAULT Chief Learning Officer (“CLO”) awards by the Tata Institute of Social
Sciences.

26
 Fiscal Year 2023 results.
June 05, 2023: InterGlobe Aviation Ltd. (“IndiGo”) today reported its fourth quarter and
fiscal year 2023 results.
For the quarter ended March 31, 2023
• Revenue from Operations of INR 62,229 million, a decrease of 25% compared to the same
period last year.
• EBITDAR of INR 6,483 million with EBITDAR margin of 10.4% compared to EBITDAR of
INR 867 million with EBITDAR margin of 1.0% for the same period last year.
• Loss before tax of INR 11,575 million, compared to a loss before tax of INR 12,898 million
during the same period last year
• Net loss of INR 11,472 million compared to a net loss of INR 8,708 million in the same period
last year.
• Basic earnings per share of negative INR 29.8
For the year ended March 31, 2023
• Revenue from Operations of INR 146,406 million, a decrease of 59.1% compared to the last
year against a capacity decrease of 52.8% during the year.
• EBITDAR of INR 6,227 million with EBITDAR margin of 4.3%, compared to EBITDAR of
INR 50,824 million with EBITDAR margin of 14.2% for the last year.
• Loss before tax of INR 58,181 million, compared to loss before tax of INR 2,557 for the last
year.
• Net loss of INR 58,064 million, compared to net loss of INR 2,337 in the last year.
• Basic earnings per share of negative INR 150.9
Strong balance sheet with a total cash of INR 185,685 million including free cash of INR 70,997
million
The Company’s CEO, Mr. Ronojoy Dutta said “This has been a very difficult year with its
revenues slumping hard due to covid, showing some signs of recovery during the period
December to February and then slumping again with the second wave of the covid. While

27
 IndiGo has seen a sharp decline in revenues in March through May, IndiGo is encouraged by the
modest revenue improvements starting last week of May and continuing through June. The
company see this pandemic as a period of great trial for both its shareholders and its employees.
IndiGo is focusing all its efforts and all its energies to strengthen the foundations and the pillars
of IndiGo so that the company emerge from this trial significantly stronger structurally and even
more customer responsive than ever before. While IndiGo has produced disappointing financial
results this year, IndiGo has also positioned itself to be the best-in-class airline when the
inevitable recovery finally arrives.”

Vision of Interglobe Aviation

➢ Empowering people to revolutionise the future of work. InterGlobe is a company that supports
its people through all their highs and lows, be it their professional or personal lives.

Mission of Interglobe Aviation

➢ offering low fares, being on-time, and delivering a courteous and hassle-free experience.

SWOT analysis of Indigo Aviation

An airline company headquartered in Gurgaon, Haryana, Indigo positions itself as a low-cost
carrier. Established as a private enterprise in the year 2006 by Rahul Bhatia, Indigo listed publicly
in the year 2009.
In addition to domestic flights to various Tier 1 and Tier 2 cities across India, Indigo also flies
to international locations like Dubai, Malaysia, Singapore, Bangkok, Kathmandu, Sharjah, and
Doha. Indigo is currently India’s largest passenger carrier and in the year 2018, it has registered
a market share of 39.9 %.
The company operates a fleet of 161 aircraft flying them to 42 domestic and 8 international
destinations. The company registered an annual turnover of 2.5 billion USD and employs around

28
12,362 employees. The company has been awarded consecutively for eight years in various
surveys done by rating agencies as one of India’s best places to work with.

Strengths in the SWOT analysis of Indigo

Strengths are defined as what each business does best in its gamut of operations which can give it
an upper hand over its competitors. The following are the strengths of Indigo :

• Positive Image: IndiGo has carved an image of being the most efficient low fare operator
not just in the domestic market but also globally. This image of a low-cost carrier that
provides high-quality services has resulted in making it the preferred travel option for many
frequent travelers.
• Services: Indigo offers a wide gamut of services such as multi-channel direct sales, online
flight booking, round the clock customer support through call centers and airport counters,
online flight status checking, a user-friendly IndiGo app for Android etc.
• High stakeholder engagement: Through a robust customer interface Indigo ensures that it
keeps track of customer needs and also communicates to every customer on a regular basis.
Indigo also has a high level of employee satisfaction and has been consistently voted into
India’s best places to work in.
• Highly drive workforce: Indigo is a hassle-free place to work in and this has ensured that
they have a highly motivated and self-driven [Link] has deployed the i-fly facility
where their new employees are given complete real-time training on how to deliver the
best customer service. This has been considered as the best training facility in this domain.
In addition to this, the company also ensures that their employees enjoy a stress-
free environment with a proper work-life balance.
• Corporate Social Responsibility: The Corporate Social Responsibility (CSR) initiative of
the airline named as IndiGoReach has undertaken a lot of initiatives for the upliftment and
well being of children, women empowerment, and environment. Their social work
encompasses not just cities but extends to remote locations as well.
• Fleet Strategy: The fleet strategy of Indigo has always focused on ensuring that the average
fleet age in four years. The airline has also ensured that it purchases its fleet at prices much
lower than what a seller would sell them for. This has helped the airline maintain its low
costs consistently.

29
Weaknesses in the SWOT analysis of Indigo
Weaknesses are used to refer to areas where the business or the brand needs improvement. Some
of the key weaknesses of Indigo are:

• Sustaining profits: Indigo is positioned as a low-cost carrier and thus pricing for the airline
needs to be as low as it can be managed. At the same time, the costs need to be maintained
as low as possible. However Indigo has often been unable to sustain its profits consistently
and this can be a weakness for the company.
• Over-dependence on volumes: In order to sustain profits the company needed to ensure
that the volumes were always high and business could not be affected by fluctuations
in demand. This means that the business needs to ensure that sufficient steps are taken to
ensure consistent volumes and this required an additional investment.
• The grounding of aircraft: After the safety of Pratt & Whitney aircraft became
questionable, the Civil Aviation Authority had to make a decision to ground these airplanes
owned by Indigo. This scandal affected the goodwill and trust of the customer.

Opportunities in the SWOT analysis of Indigo

Opportunities refer to those avenues in the environment that surrounds the business on which it
can capitalize to increase its returns. Some of the opportunities include:

• Growing demand for foreign travel: There is a surge in the number of people in India who
need to travel to foreign locations both for business and pleasure. This means that there is a
huge scope for the airline to expand to more foreign destinations.

30
Threats in the SWOT analysis of Indigo
Threats are those factors in the environment which can be detrimental to the growth of the
business. Some of the threats include:

• Competition: The airline faces a lot of competition from brands such as Jet Airways, Indian
Airlines, Air India, Singapore Airlines etc.
• Costing: The key components of cost in an airline is the fuel which is highly fluctuating
and in order to manage the pricing in accordance with the dynamics of fuel prices is a threat
today and even in the future.

31
SpiceJet Airlines

CEO/OWNER OF SPICEJET
Ajay Singh (born 29 December 1965) is an Indian businessman, sports administrator,
bureaucrat and investor. He is the principal shareholder, Chairman and Managing Director of
SpiceJet, India's second-largest airline.

Management
Non [Link] [Link]
Shiwani Singh

Independent Director
Anurag Bhargava
Ajay Aggarwal
Manoj Kumar

Ownership and structure

SpiceJet Limited is publicly traded under NSE: SPICEJET, with a market capitalization of about
₹2,214.28 Cr as of 1 April 2020.
On 30 March 2020, HDFC Mutual Fund bought 3.4 crore shares of SpiceJet from the open
market constituting 5.45% stake

Headquarters
SpiceJet is headquartered in Gurgaon, India
Registered Office
Address
Indira Gandhi International Airport, Terminal 1D New Delhi, 110037
Email
investors@[Link]

Internet
[Link]
Registrars

Address
Selenium Tower B, Plot No. 31-32, Gachibowli, Financial District, Nanakramguda Seri,
Telangana, Hyderabad 500032

32
History of SpiceJet Airlines

SpiceJet is an Indian low-cost carrier based at Indira Gandhi International Airport, New Delhi.
SpiceJet is one of India's largest airlines serving domestic destinations across India. The airline
commenced international operations in October 2010 and currently operate flights to 62
destinations – 53 domestic and 9 internationals.
Established as air taxi provider ModiLuft in 1994, the company was acquired by Indian
entrepreneur Ajay Singh in 2004 and re-christened as SpiceJet. The airline operated its first
flight in May 2005. Indian media baron Kalanidhi Maran acquired a controlling stake in SpiceJet
in June 2010 through Sun Group which was sold back to Ajay Singh in January 2015. The
airline operates a fleet of Boeing 737 and Bombardier Dash 8 aircraft

History
1984–1996: ModiLuft era
The origins of SpiceJet can be tracked back to March 1984 when the company was established
by Indian industrialist S. K. Modi to provide private air taxi [Link] 17 February 1993, the
company was named as MG Express and entered into technical partnership with the German flag
carrier Lufthansa. The airline provided passenger and cargo services under the name
of Modiluft before ceasing operations in 1996.
2005–2013: Inception and expansion
In 2004, the company was acquired by Ajay Singh and the airline planned to restart operations
as SpiceJet following the low-cost model. SpiceJet leased two Boeing 737-800 aircraft in 2005
and planned to order 10 new aircraft for expansion.[7] SpiceJet opened bookings on 18 May 2005
and the first flight was operated between Delhi and Mumbai on 24 May 2005. By July 2008, it
was India's third-largest low-cost carrier in terms of market share after Air Deccan and IndiGo.
Indian media baron Kalanidhi Maran acquired 37.7% stake in SpiceJet in June 2010 through Sun
[Link] airline ordered 30 Boeing 737-8 aircraft worth US$2.7 billion July 2010 and a further
15 Bombardier Q4 Dash short-haul aircraft worth US$446 million in December 2010.
In 2012, SpiceJet suffered a loss of over ₹390 million (US$5.5 million) owing to increase in
global crude prices. On 9 January 2012, the Directorate General of Civil Aviation, reported that
several airlines in India, including SpiceJet, have not maintained crucial data for the flight
operations quality assurance. The Bombay Stock Exchange announced that ever since June

33
2011, SpiceJet had been suffering losses In 2012, Kalanidhi Maran increased his stake in the
airline by investing ₹1 billion (US$14 million) in the airline. The airline returned to profits at the
end of the same year. SpiceJet entered into an inter airline pact with Tigerair on 16 December
2013 which was scrapped in January 2015.
2014–2019: Downturn and recovery
In January 2015, the Sun Group sold its entire shareholding and transferred control to Ajay
Singh.
In late September 2017, the airline announced that it had placed a firm order for 25 Q400
turboprop aircraft.[20]
2020-Present: Pandemic
SpiceExpress the logistics arm of SpiceJet airline--has helped to keep the company afloat during
the pandemic amid drastic drop in passenger business. In May 2023, the airline earned Rs 200
crore from freight operations and commands a 5 per cent market share in India's outbound cargo
business.
In July 2023, SpiceJet reported net losses shrunk to US$34.6 million during the fiscal quarter
ended 31 March 2023, as revenue fell by 28% annually to $294.8 million. The airline plans to
raise funds to the tune of $337.2 million to ensure its long term sustainability.

VISION OF SPICEJET
SpiceJet Limited has a vision for total customer satisfaction and enhancing stakeholders'
value. SpiceJet's mission is to become India's preferred airline with the highest consumer
value through honest and ethical conduct of the business.

MISSION OF SPICEJET
SpiceJet's mission is to become India's preferred low-cost airline, delivering the lowest air
fares with the highest customer value, to price sensitive customers. We hope to fulfill
everyone's dream of flying! With India's economic and business growth, the percentage of
traveling population is burgeoning.

34
35
SpiceJet is an Indian low-cost carrier based at Indira Gandhi
International Airport, New Delhi. SpiceJet is one of
India's largest airlines serving domestic destinations across
India. The airline commenced international operations in October
2010 and currently operate flights to 62 destinations – 53
domestic and 9 internationals.

Spicejet – [Link].
2023 In May 2023, SpiceJet started a COVID-19 inoculation drive for its employees
In May 2023, SpiceXpress, the air cargo arm of SpiceJet, airlifted 9,600 oxygen
concentrators from Beijing, Wuhan, Nanjing and Hong Kong to meet the
shortage in Kolkata and Delhi
In March 2023, SpiceJet announced plan to add 66 flights, including additional
services on certain routes, to its domestic network by March 2023

2022 In December 2022, SpiceJet entered into a partnership with Om Logistics for
Covid-19 vaccine transportation
In August 2022, SpiceJet launched SpiceOxy – a compact, portable and non-
invasive ventilation device in its fight against COVID-19
SpiceJet signed tripartite MoU (memorandum of understanding) with GHIAL
and Ras-Al-Khaimah International Airport for a dedicated freight corridor

2021 Direct flights to Delhi from Mangalore International Airport (MIA) launched
Touched its highest-ever quarterly profit of Rs. 261.7 crore (US$ 3.74 million)

2020 SpiceJet is expected to join the global airlines' grouping the International Air
Transport Association (IATA) as a member
Adjudged as the 'Best Domestic Airline' at Wings India 2020

2019 Records over 90 per cent load factor for 31 consecutive months

2018 SpiceJet decides to take on a global market strategy to expand beyond

traditional markets

2017 SpiceJet initiates major network expansion with six new aircraft

36
2016 Chosen as India's International Low Cost Carrier of the Year 2016 by Travel
Agents Association of India

2015 Announced that it will order 30 Boeing 737-800 aircraft increasing its fleet size
to 58 planes

2014 Tied up with BillDesk to provide customers an option to purchase tickets online

2013 Introduced two new additional daily flights on the Bangalore-Mumbai-

Hyderabad routes

2012 Inducted five new aircraft taking their total fleet to 11 aircraft

2010 Integrated with various travel related websites to boost internet sales
Change the name of the company to SpiceJet Ltd

2009 Started commercial operations of domestic flight services with three leased
Boeing aircraft

2008 Name of the company changed to Royal Airways Ltd

1994 Entered into a mangement agreement with Lufthansa to manage their entire
airline operations

1994 Name of the company changed to ModiLuft Ltd

1993 The company ventures into domestic aviation through a partnership with
Deutsche Lufthansa AG

1984 Incorporation of Genius Leasing Finance and Investment Company Ltd

37
SWOT analysis of SpiceJet
A popular low-cost airline, SpiceJet was formed during the year 2005 and is headquartered in
Haryana, India. SpiceJet is the fourth largest airline in the country that carries many domestic
passengers and has a market share of about 13.3% as of the year 2017.
The company’s tagline says ‘flying for everyone’. SpiceJet operates about 312 daily flights to
about 55 destinations that include 47 Indian and seven international destinations from places like
Delhi, Mumbai, Kolkata, and Hyderabad. It was established as an air traffic provider ModiLuft
during the year 1994. It later was acquired by Indian entrepreneur Ajay Singh during the year 2004
and restarted its operations as SpiceJet.
This airline also operates a fleet of Boeing 737 and Bombardier aircraft. SpiceJet provides
premium services with the name of SpiceMax where the passengers can get additional benefits
that include pre-assigned seats with extra legroom, priority check-in, complimentary meals on
board, and many more.
Having been a popular low-cost airline, let us examine the SWOT of SpiceJet.

Strengths in the SWOT analysis of SpiceJet

38
The power to fly – The management personnel of SpiceJet are all seasoned professionals and
seniors who have a good amount of international experience in both managing and launching low-
cost airlines. By having many man-hours in the industry, the management is committed to bringing
to customers in India, the benefits of the global revolution in the skies. The airline provides a
comfortable journey that is affordable and refreshing.

Safety features – The airline invests a huge amount in safety and maintenance of aircraft by a
high level of expertise people. The pilots, maintenance crew, and its engineers are given rigorous
training and are hand-picked for their experience and knowledge in the domain. Hence the
passengers can rest while traveling.

Dynamic fare structure – Having a dynamic fare structure, the airline provides fares that are
affordable and comparatively lower those other airlines. Having contemporary interiors,
vibrant colors, and modern graphics, SpiceJet most fits the current traveler.

Good reachability – SpiceJet has good reachability to about 55 destinations. This makes the
traveler fly to these destinations easily.

Good market presence – SpiceJet has a good presence in the market as it has maintained a
good advertising strategy. Due to this, it has a good brand value.

An Interactive website – SpiceJet provides an interactive website that allows booking through
their website. By this, the customers can book the tickets; perform check-in through online itself.

Tourism partnership – SpiceJet has partnered with Tripfactory for selling holiday packages by
using the platform. This will increase their business revenue.

The Rs. 99 fare – It started off with Rs. 99 far for the first 99 days to attract the passengers. This
has got many passengers to the airline for the first few days to increase their visibility.

Weaknesses in the SWOT analysis of SpiceJet

High competition – SpiceJet faces strong competition from other competitors and due to which
it has low market share.

Limited destinations – The number of destinations served by the airline is low as compared to
other airline services. This will provide a restriction to passengers who travel to other destinations
not listed in the SpiceJet destinations.

Wrong decisions – During the year 2014, SpiceJet announced 50% discounts as the airline was
facing a lot of competition. Due to this it has to cancel many domestic flights across the country
and caused a lot of chaos to the passengers.

39
Frequent offers – SpiceJet providing frequent offers to the passengers is not a good idea to gain
passengers. This will impact their revenue generation thereby facing a lot of loss in the business.

High airport and fuel cost – All the airlines including SpiceJet face the heat of having a high-
cost environment that is widespread in the aviation industry. This will amount to major of their
income thereby leading to a low revenue generation.

Dip in their profit – During the recent months, the airline has posted a major loss of Rs. 38 crore
as compared to the profit of about Rs. 175.2 crore in the previous year.

Opportunities in the SWOT analysis of SpiceJet

Low airfare, hence more passengers – Since SpiceJet is popular for their low-cost airfare,
much middle class who wish to travel through airline can make use of SpiceJet for their travel.
More routes and destinations – SpiceJet can gain more opportunities to grow their business by
introducing more routes and destinations. The airline can increase their destinations to popular
places that will fetch them more passengers.

Having international partnership – Having partnerships with the international market can
increase their visibility and their brand image.

Growing interest in tourism – Since SpiceJet has partnered with tourism sector; there is a
huge opportunity for it. The tourism sector is growing in India and this helps the business to grow.

Tax holiday on leasing of aircraft – India’s Union Budget Government of India has announced
five year tax holiday on the event of leasing an aircraft.

Threats in the SWOT analysis of SpiceJet

Strong competition – SpiceJet faces a lot of competition from its competitors which is a serious
threat to the airline services.

40
Fuel increase – The rising fuel cost can be a threat to their economy. This will decrease the
margins for the airline.

Change of government policies – Frequent change in government policies and having pressure
from the international market will affect the brand operations and image of the company.

41
 Data Analysis
Capital Structure
Of
Interglobe Aviation
Capital Structure
Period Instrument --- CAPITAL (Rs. cr) --- -PAIDUP-
From To Authorised Issued Shares (no’s) Face Value Capital
2022 2023 Equity Share 750 384.91 384910000 10 384.91

2023 2022 Equity Share 750 384.8 384796279 10 384.8

2020 2023 Equity Share 750 384.41 384406838 10 384.41

2019 2020 Equity Share 750 384.41 384406838 10 384.41

2018 2019 Equity Share 750 361.47 361468363 10 361.47

2018 2019 Equity Share 750 360.36 360356544 10 360.36

2017 2018 Equity Share 50 30.7 307000 1000 30.7

42
 Capital Structure
Of
SpiceJet

Capital Structure
Period Instrument --- CAPITAL (Rs. cr) --- -PAIDUP-
From To Authorised Issued Shares (no’s) Face Value Capital
2022 2023 Equity Share 1500 600.08 600076299 10 600.08

2023 2022 Equity Share 1500 599.72 599718356 10 599.72

2020 2023 Equity Share 1500 599.45 599450183 10 599.45

2019 2020 Equity Share 1500 599.45 599450183 10 599.45

2018 2016 Equity Share 1500 599.45 599450183 10 599.45

2017 2018 Equity Share 1500 599.45 599450183 10 599.45

43
KEY FINANCIAL RATIOS OF INTERGLOBE AVIATION

KEY FINANCIAL RATIOS OF MARCH MARCH

INTERGLOBE AVIATION (in Rs. Cr.) 2023 2022

PER SHARE RATIOS

Basic EPS (Rs.) -151.49 -6.45

Diluted EPS (Rs.) -151.49 -6.45

Cash EPS (Rs.) -29.39 96.82

Book Value [ExclRevalReserve]/Share (Rs.) 1.69 152.20

Book Value [InclRevalReserve]/Share (Rs.) 1.69 152.20

Dividend / Share(Rs.) 0.00 0.00

Revenue from Operations/Share (Rs.) 380.37 929.22

PBDIT/Share (Rs.) 26.26 144.87

PBIT/Share (Rs.) -95.81 41.60

PBT/Share (Rs.) -151.46 -7.15

Net Profit/Share (Rs.) -151.46 -6.45

44
PROFITABILITY RATIOS OF INTERGLOBE AVIATION

PROFITABILITY RATIOS MAR23 MAR22

PBDIT Margin (%) 6.90 15.59

PBIT Margin (%) -25.18 4.47

PBT Margin (%) -39.81 -0.76

Net Profit Margin (%) -39.81 -0.69

Return on Networth / Equity (%) -8,964.77 -4.23

Return on Capital Employed (%) -15.31 6.24

Return on Assets (%) -13.56 -0.59

Total Debt/Equity (X) 38.53 0.06

Asset Turnover Ratio (%) 34.06 85.03

45
LIQUIDITY RATIOS OF INTERGLOBE AVIATION

LIQUIDITY RATIOS MAR 23 MAR22

Current Ratio (X) 1.10 1.37

Quick Ratio (X) 1.08 1.35

Inventory Turnover Ratio (X) 46.27 124.97

Dividend Payout Ratio (NP) (%) 0.00 0.00

Dividend Payout Ratio (CP) (%) 0.00 0.00

Earnings Retention Ratio (%) 0.00 0.00

Cash Earnings Retention Ratio (%) 0.00 0.00

46
VALUATION RATIOS OF INTERGLOBE AVIATION

VALUATION RATIOS MAR23 MAR22

Enterprise Value (Cr.) 54,209.42 30,623.01

EV/Net Operating Revenue (X) 3.70 0.86

EV/EBITDA (X) 53.63 5.49

MarketCap/Net Operating Revenue (X) 4.30 1.15

Retention Ratios (%) 0.00 0.00

Price/BV (X) 968.00 7.02

Price/Net Operating Revenue 4.30 1.15

Earnings Yield -0.09 -0.01

47
KEY FINANCIAL RATIOS OF SPICEJET

KEY FINANCIAL RATIOS OF SPICEJET (in Rs. MAR 23 MAR 22

Cr.)

PER SHARE RATIOS

Basic EPS (Rs.) -16.61 -15.58

Diluted EPS (Rs.) -16.61 -15.53

Cash EPS (Rs.) 9.31 13.32

Book Value [ExclRevalReserve]/Share (Rs.) -42.79 -26.32

Book Value [InclRevalReserve]/Share (Rs.) -42.79 -26.32

Dividend / Share(Rs.) 0.00 0.00

Revenue from Operations/Share (Rs.) 85.42 205.95

PBDIT/Share (Rs.) 19.33 22.40

PBIT/Share (Rs.) -6.59 -6.50

PBT/Share (Rs.) -16.61 -15.58

Net Profit/Share (Rs.) -16.61 -15.58

PROFITABILITY RATIOS OF SPICEJET

PROFITABILITY RATIOS MAR 23 MAR 22

PBDIT Margin (%) 22.63 10.87

PBIT Margin (%) -7.71 -3.15

PBT Margin (%) -19.44 -7.56

Net Profit Margin (%) -19.44 -7.56

48
Return on Networth / Equity (%) 0.00 0.00

Return on Capital Employed (%) -10.97 -6.16

Return on Assets (%) -8.77 -7.20

Total Debt/Equity (X) -0.27 -0.55

Asset Turnover Ratio (%) 45.12 95.30

LIQUIDITY RATIOS OF SPICEJET

LIQUIDITY RATIOS MAR 23 MAR 22

Current Ratio (X) 0.33 0.33

Quick Ratio (X) 0.31 0.31

Inventory Turnover Ratio (X) 32.94 69.59

Dividend Payout Ratio (NP) (%) 0.00 0.00

Dividend Payout Ratio (CP) (%) 0.00 0.00

Earnings Retention Ratio (%) 0.00 0.00

Cash Earnings Retention Ratio (%) 0.00 0.00

VALUATION RATIOS OF SPICEJET

VALUATION RATIOS MAR 23 MAR 22

Enterprise Value (Cr.) 4,851.63 3,047.84

EV/Net Operating Revenue (X) 0.95 0.25

EV/EBITDA (X) 4.18 2.27

MarketCap/Net Operating Revenue (X) 0.81 0.18

Retention Ratios (%) 0.00 0.00

Price/BV (X) -1.62 -1.40

Price/Net Operating Revenue 0.81 0.18

49
Earnings Yield -0.24 -0.42

FINANCIAL STATEMENT OF INTERGLOBE AVIATION

PROFIT & LOSS ACCOUNT OF INTERGLOBE

PROFIT & LOSS ACCOUNT OF INTERGLOBE MAR 23 MAR 22

AVIATION (in Rs. Cr.)

12 mths 12 mths

INCOME

REVENUE FROM OPERATIONS [GROSS] 14,209.90 35,368.86

Less: Excise/Sevice Tax/Other Levies 0.00 0.00

REVENUE FROM OPERATIONS [NET] 14,209.90 35,368.86

TOTAL OPERATING REVENUES 14,640.63 35,756.00

Other Income 1,036.33 1,536.24

TOTAL REVENUE 15,676.96 37,292.24

EXPENSES

Cost Of Materials Consumed 0.00 0.00

Operating And Direct Expenses 1,667.21 3,092.59

Changes In Inventories Of FG,WIP And Stock-In Trade 1.16 -3.05

Employee Benefit Expenses 3,026.20 4,395.36

Finance Costs 2,141.98 1,875.87

Depreciation And Amortisation Expenses 4,698.69 3,973.61

Other Expenses 1,668.53 5,415.26

TOTAL EXPENSES 21,506.76 37,567.33

50
PROFIT/LOSS BEFORE EXCEPTIONAL, -5,829.79 -275.09
EXTRAORDINARY ITEMS AND TAX

Exceptional Items 0.00 0.00

PROFIT/LOSS BEFORE TAX -5,829.79 -275.09

TAX EXPENSES-CONTINUED OPERATIONS

Current Tax 0.00 0.82

Less: MAT Credit Entitlement 0.00 0.00

Deferred Tax 0.00 -27.75

Tax For Earlier Years 0.00 0.00

TOTAL TAX EXPENSES 0.00 -26.93

PROFIT/LOSS AFTER TAX AND BEFORE -5,829.79 -248.16

EXTRAORDINARY ITEMS

PROFIT/LOSS FROM CONTINUING OPERATIONS -5,829.79 -248.16

PROFIT/LOSS FOR THE PERIOD -5,829.79 -248.16

OTHER ADDITIONAL INFORMATION

EARNINGS PER SHARE

Basic EPS (Rs.) -151.49 -6.45

Diluted EPS (Rs.) -151.49 -6.45

VALUE OF IMPORTED AND INDIGENIOUS RAW

MATERIALS STORES, SPARES AND LOOSE
TOOLS

Imported Raw Materials 0.00 0.00

Indigenous Raw Materials 0.00 0.00

STORES, SPARES AND LOOSE TOOLS

51
Imported Stores And Spares 0.00 0.00

Indigenous Stores And Spares 0.00 0.00

DIVIDEND AND DIVIDEND PERCENTAGE

Equity Share Dividend 0.00 0.00

Tax On Dividend 0.00 0.00

Equity Dividend Rate (%) 0.00 0.00

BALANCE SHEET OF INTERGLOBE AVIATION

BALANCE SHEET OF INTERGLOBE AVIATION (in Rs. MAR 23 MAR 22

Cr.)

12 mths 12 mths

EQUITIES AND LIABILITIES

SHAREHOLDER'S FUNDS

Equity Share Capital 384.91 384.80

TOTAL SHARE CAPITAL 384.91 384.80

Reserves and Surplus -354.90 5,461.25

TOTAL RESERVES AND SURPLUS -354.90 5,461.25

TOTAL SHAREHOLDERS FUNDS 65.03 5,856.56

NON-CURRENT LIABILITIES

Long Term Borrowings 381.63 346.59

Deferred Tax Liabilities [Net] 0.00 0.00

Other Long Term Liabilities 23,082.68 18,875.60

Long Term Provisions 537.27 553.32

52
TOTAL NON-CURRENT LIABILITIES 24,001.57 19,775.51

CURRENT LIABILITIES

Short Term Borrowings 2,124.00 0.00

Trade Payables 1,556.06 1,565.47

Other Current Liabilities 13,614.98 13,449.96

Short Term Provisions 1,606.74 1,395.09

TOTAL CURRENT LIABILITIES 18,901.77 16,410.51

TOTAL CAPITAL AND LIABILITIES 42,974.25 42,048.46

ASSETS

NON-CURRENT ASSETS

Tangible Assets 18,782.24 16,744.61

Intangible Assets 33.23 33.59

Capital Work-In-Progress 66.35 129.27

Other Assets 0.00 0.00

FIXED ASSETS 18,887.21 16,918.44

Non-Current Investments 0.19 0.19

Deferred Tax Assets [Net] 294.94 294.94

Long Term Loans And Advances 1,578.83 1,274.15

Other Non-Current Assets 1,452.54 1,149.28

TOTAL NON-CURRENT ASSETS 22,213.72 19,637.00

CURRENT ASSETS

Current Investments 7,289.98 9,499.17

53
Inventories 316.42 286.13

Trade Receivables 219.17 259.61

Cash And Cash Equivalents 11,227.06 10,829.41

Short Term Loans And Advances 128.60 455.12

OtherCurrentAssets 1,579.31 1,082.02

TOTAL CURRENT ASSETS 20,760.53 22,411.46

TOTAL ASSETS 42,974.25 42,048.46

OTHER ADDITIONAL INFORMATION

CONTINGENT LIABILITIES,
COMMITMENTS

Contingent Liabilities 293,933.59 320,857.87

CIF VALUE OF IMPORTS

Raw Materials 0.00 0.00

Stores, Spares And Loose Tools 0.00 0.00

Trade/Other Goods 0.00 0.00

Capital Goods 0.00 0.00

EXPENDITURE IN FOREIGN EXCHANGE

Expenditure In Foreign Currency 11,054.18 15,173.42

REMITTANCES IN FOREIGN
CURRENCIES FOR DIVIDENDS

Dividend Remittance In Foreign Currency -- -- -- - -

- -

EARNINGS IN FOREIGN EXCHANGE

FOB Value Of Goods -- --

54
Other Earnings 1,681.76 4,544.71

BONUS DETAILS

Bonus Equity Share Capital 309.25 309.34

NON-CURRENT INVESTMENTS

Non-Current Investments Quoted Market Value -- -- -- - -

- -

Non-Current Investments Unquoted Book Value 0.19 0.19

CURRENT INVESTMENTS

Current Investments Quoted Market Value -- -- -- - -

- -

Current Investments Unquoted Book Value 7,289.98 9,499.17

CASH FLOW OF INTERGLOBE AVIATION

CASH FLOW OF INTERGLOBE AVIATION (in MAR 23 MAR 22

Rs. Cr.)

12 mths 12 mths

NET PROFIT/LOSS BEFORE -5,829.79 -275.09

EXTRAORDINARY ITEMS AND TAX

Net CashFlow From Operating Activities -1,620.40 6,943.30

Net Cash Used In Investing Activities 3,245.71 -4,566.91

Net Cash Used From Financing Activities -1,775.34 -2,407.48

Foreign Exchange Gains / Losses -17.73 -5.65

Adjustments On Amalgamation Merger Demerger 0.00 0.00

Others

NET INC/DEC IN CASH AND CASH -167.76 -36.74

EQUIVALENTS

55
Cash And Cash Equivalents Begin of Year 676.04 712.78

Cash And Cash Equivalents End Of Year 508.28 676.04

FINANCIAL STATEMENT OF SPICEJET

PROFIT & LOSS ACCOUNT OF SPICEJET

PROFIT & LOSS ACCOUNT OF SPICEJET (in Rs. MAR 23 MAR 22

Cr.)

12 mths 12 mths

INCOME

REVENUE FROM OPERATIONS [GROSS] 4,948.74 11,989.61

Less: Excise/Sevice Tax/Other Levies 0.00 0.00

REVENUE FROM OPERATIONS [NET] 4,948.74 11,989.61

TOTAL OPERATING REVENUES 5,133.38 12,358.64

Other Income 987.42 847.66

TOTAL REVENUE 6,120.79 13,206.30

EXPENSES

Cost Of Materials Consumed 0.00 0.00

Operating And Direct Expenses 0.00 2,633.30

Changes In Inventories Of FG,WIP And Stock-In Trade 0.00 0.00

Employee Benefit Expenses 676.24 1,525.78

Finance Costs 602.05 545.01

Depreciation And Amortisation Expenses 1,557.96 1,733.93

56
Other Expenses 4,282.85 1,556.39

TOTAL EXPENSES 7,119.10 14,141.06

PROFIT/LOSS BEFORE EXCEPTIONAL, -998.30 -934.76

EXTRAORDINARY ITEMS AND TAX

Exceptional Items 0.00 0.00

PROFIT/LOSS BEFORE TAX -998.30 -934.76

TAX EXPENSES-CONTINUED OPERATIONS

Current Tax 0.00 0.00

Less: MAT Credit Entitlement 0.00 0.00

Deferred Tax 0.00 0.00

Tax For Earlier Years 0.00 0.00

TOTAL TAX EXPENSES 0.00 0.00

PROFIT/LOSS AFTER TAX AND BEFORE -998.30 -934.76

EXTRAORDINARY ITEMS

PROFIT/LOSS FROM CONTINUING -998.30 -934.76

OPERATIONS

PROFIT/LOSS FOR THE PERIOD -998.30 -934.76

OTHER ADDITIONAL INFORMATION

EARNINGS PER SHARE

Basic EPS (Rs.) -16.61 -15.58

Diluted EPS (Rs.) -16.61 -15.53

VALUE OF IMPORTED AND INDIGENIOUS

RAW MATERIALS STORES, SPARES AND
LOOSE TOOLS

Imported Raw Materials 0.00 0.00

57
Indigenous Raw Materials 0.00 0.00

STORES, SPARES AND LOOSE TOOLS

Imported Stores And Spares 0.00 0.00

Indigenous Stores And Spares 0.00 0.00

DIVIDEND AND DIVIDEND PERCENTAGE

Equity Share Dividend 0.00 0.00

Tax On Dividend 0.00 0.00

Equity Dividend Rate (%) 0.00 0.00

BALANCE SHEET OF SPICEJET

BALANCE SHEET OF SPICEJET (in Rs. Cr.) MAR 23 MAR 22

12 mths 12 mths

EQUITIES AND LIABILITIES

SHAREHOLDER'S FUNDS

Equity Share Capital 600.94 600.08

TOTAL SHARE CAPITAL 600.94 600.08

Reserves and Surplus -3,172.47 -2,179.34

TOTAL RESERVES AND SURPLUS -3,172.47 -2,179.34

TOTAL SHAREHOLDERS FUNDS -2,571.53 -1,579.27

NON-CURRENT LIABILITIES

Long Term Borrowings 302.67 459.30

Deferred Tax Liabilities [Net] 0.00 0.00

58
Other Long Term Liabilities 5,375.13 6,808.47

Long Term Provisions 504.99 628.48

TOTAL NON-CURRENT LIABILITIES 6,182.80 7,896.25

CURRENT LIABILITIES

Short Term Borrowings 404.48 414.44

Trade Payables 1,710.63 1,737.11

Other Current Liabilities 5,111.83 4,022.11

Short Term Provisions 537.32 476.18

TOTAL CURRENT LIABILITIES 7,764.26 6,649.84

TOTAL CAPITAL AND LIABILITIES 11,375.52 12,966.82

ASSETS

NON-CURRENT ASSETS

Tangible Assets 7,005.98 8,663.64

Intangible Assets 0.00 17.32

Capital Work-In-Progress 0.00 0.00

Other Assets 0.00 0.00

FIXED ASSETS 7,005.98 8,680.95

Non-Current Investments 2.15 0.12

Deferred Tax Assets [Net] 0.00 0.00

Long Term Loans And Advances 541.06 33.04

Other Non-Current Assets 1,247.92 2,025.91

TOTAL NON-CURRENT ASSETS 8,797.10 10,740.03

CURRENT ASSETS

59
Current Investments 0.42 0.39

Inventories 155.83 177.59

Trade Receivables 2,039.81 1,545.82

Cash And Cash Equivalents 32.03 40.18

Short Term Loans And Advances 34.27 0.00

OtherCurrentAssets 316.07 462.82

TOTAL CURRENT ASSETS 2,578.42 2,226.80

TOTAL ASSETS 11,375.52 12,966.82

OTHER ADDITIONAL INFORMATION

CONTINGENT LIABILITIES, COMMITMENTS

Contingent Liabilities 0.00 56,079.82

CIF VALUE OF IMPORTS

Raw Materials 0.00 0.00

Stores, Spares And Loose Tools 0.00 0.00

Trade/Other Goods 0.00 0.00

Capital Goods 0.00 0.00

EXPENDITURE IN FOREIGN EXCHANGE

Expenditure In Foreign Currency 0.00 5,113.10

REMITTANCES IN FOREIGN CURRENCIES FOR

DIVIDENDS

Dividend Remittance In Foreign Currency -- --

EARNINGS IN FOREIGN EXCHANGE

FOB Value Of Goods -- --

Other Earnings -- 1,045.90

60
BONUS DETAILS

Bonus Equity Share Capital --

Type your text

NON-CURRENT INVESTMENTS

Non-Current Investments Quoted Market Value -- --

Non-Current Investments Unquoted Book Value -- 0.05

CURRENT INVESTMENTS

Current Investments Quoted Market Value -- 0.39

Current Investments Unquoted Book Value -- --

CASH FLOW OF SPICEJET

CASH FLOW OF SPICEJET (in Rs. Cr.) MAR 23 MAR 22

12 mths 12 mths

NET PROFIT/LOSS BEFORE EXTRAORDINARY 0.00 -934.76

ITEMS AND TAX

Net CashFlow From Operating Activities 0.00 1,841.79

Net Cash Used In Investing Activities 0.00 -178.70

Net Cash Used From Financing Activities 0.00 -

1,704.25

Foreign Exchange Gains / Losses 0.00 4.37

Adjustments On Amalgamation Merger Demerger 0.00 0.00

Others

NET INC/DEC IN CASH AND CASH 0.00 -36.79

EQUIVALENTS

Cash And Cash Equivalents Begin of Year 0.00 64.95

Cash And Cash Equivalents End Of Year 0.00 28.16

61
YEARLY RESULTS OF INTERGLOBE AVIATION

YEARLY RESULTS OF INTERGLOBE AVIATION (in MAR '23 MAR '22

Rs. Cr.)

Net Sales/Income from operations 14,640.63 35,756.00

Other Operating Income -- --

Total Income From Operations 14,640.63 35,756.00

EXPENDITURE

Consumption of Raw Materials -- --

Purchase of Traded Goods 54.32 180.91

Increase/Decrease in Stocks 1.16 -3.05

Power & Fuel -- 12,453.79

Employees Cost 3,026.20 4,395.36

Depreciation 4,698.69 3,973.61

Excise Duty -- --

Admin. And Selling Expenses -- --

R & D Expenses -- --

Provisions And Contingencies -- --

Exp. Capitalised -- --

Other Expenses 11,584.41 14,690.84

P/L Before Other Inc. , Int., Excpt. Items & Tax -4,724.14 64.54

Other Income 1,036.33 1,536.24

P/L Before Int., Excpt. Items & Tax -3,687.81 1,600.78

Interest 2,141.98 1,875.87

62
P/L Before Exceptional Items & Tax -5,829.79 -275.09

Exceptional Items -- --

P/L Before Tax -5,829.79 -275.09

Tax -- -26.93

P/L After Tax from Ordinary Activities -5,829.79 -248.16

Prior Year Adjustments -- --

Extra Ordinary Items -- --

Net Profit/(Loss) For the Period -5,829.79 -248.16

Equity Share Capital 384.91 384.80

Reserves Excluding Revaluation Reserves -354.90 5,461.25

Equity Dividend Rate (%) -- --

EPS BEFORE EXTRA ORDINARY

Basic EPS -151.49 -6.45

Diluted EPS -151.49 -6.45

EPS AFTER EXTRA ORDINARY

Basic EPS. -151.49 -6.45

Diluted EPS. -151.49 -6.45

PUBLIC SHARE HOLDING

No Of Shares (Crores) -- --

Share Holding (%) -- --

PROMOTERS AND PROMOTER GROUP

SHAREHOLDING

A) PLEDGED/ENCUMBERED

- Number of shares (Crores) -- --

63
- Per. of shares (as a % of the total sh. of prom. and -- --
promoter group)

- Per. of shares (as a % of the total Share Cap. of the -- --

company)

B) NON-ENCUMBERED

- Number of shares (Crores). -- --

- Per. of shares (as a % of the total sh. of prom. and -- --

promoter group).

- Per. of shares (as a % of the total Share Cap. of the -- --

company).

64
YEARLY RESULTS OF SPICEJET

YEARLY RESULTS OF SPICEJET (in Rs. Cr.) MAR '23 MAR '22

Net Sales/Income from operations 4,948.74 11,989.61

Other Operating Income 184.64 369.03

Total Income From Operations 5,133.38 12,358.64

EXPENDITURE

Consumption of Raw Materials -- --

Purchase of Traded Goods -- --

Increase/Decrease in Stocks -- --

Power & Fuel -- --

Employees Cost 676.24 1,525.78

Depreciation 1,557.96 1,733.93

Excise Duty -- --

Admin. And Selling Expenses -- --

R & D Expenses -- --

Provisions And Contingencies -- --

Exp. Capitalised -- --

Other Expenses 4,282.85 10,336.47

P/L Before Other Inc. , Int., Excpt. Items & Tax -1,383.67 -1,237.53

Other Income 987.42 847.78

P/L Before Int., Excpt. Items & Tax -396.25 -389.75

Interest 602.05 545.01

P/L Before Exceptional Items & Tax -998.30 -934.76

65
Exceptional Items -- --

P/L Before Tax -998.30 -934.76

Tax -- --

P/L After Tax from Ordinary Activities -998.30 -934.76

Prior Year Adjustments -- --

Extra Ordinary Items -- --

Net Profit/(Loss) For the Period -998.30 -934.76

Equity Share Capital 600.94 600.08

Reserves Excluding Revaluation Reserves -3,172.47 -2,179.34

Equity Dividend Rate (%) -- --

EPS BEFORE EXTRA ORDINARY

Basic EPS -16.61 -15.58

Diluted EPS -16.61 -15.58

EPS AFTER EXTRA ORDINARY

Basic EPS. -16.61 -15.58

Diluted EPS. -16.61 -15.58

PUBLIC SHARE HOLDING

No Of Shares (Crores) -- --

Share Holding (%) -- --

PROMOTERS AND PROMOTER GROUP

SHAREHOLDING

A) PLEDGED/ENCUMBERED

66
- Number of shares (Crores) -- --

- Per. of shares (as a % of the total sh. of prom. and -- --

promoter group)

- Per. of shares (as a % of the total Share Cap. of the -- --

company)

B) NON-ENCUMBERED

- Number of shares (Crores). -- --

- Per. of shares (as a % of the total sh. of prom. and -- --

promoter group).

- Per. of shares (as a % of the total Share Cap. of the -- --

company).

67
 PEER COMPARISON
PEERS
% 1 Yr Net Net
Company MarketCa TTM Debt to
Price Chan P/B ROE(%) Perfor Profit( Sales(R
Name p(Cr) PE Equity
ge m(%) Rs.) s.)

Interglobe 1,818.4
-7.01 70,043.12 - 999.12 -5,530.98 10.14 -5,806 14,640 23.87
Aviation 0

SpiceJet 63.85 -3.84 3,839.86 - - 0.00 -37.19 -1,029 5,171 -0.27

68
 Comparison
IndiGo vs SpiceJet– Which Indian Low-Cost Carrier Is Better For Passengers?

The Indian aviation industry comprises of one of the most cost-sensitive passenger demand in
the world. The reason behind this might not be purely financial but also cultural. On average, a
flight from one corner to another corner of India doesn’t take more than 2.5 hours. Hence,
Indians, in general, are more inclined towards spending less than experiencing premium service
for such a small period. Around the early 2000s, the Indian government had opened the airline
industry for private carriers. Since then, low-cost carriers (LCCs) like IndiGo and SpiceJet have
turned the dynamics of the airline market.

Growth of Low-cost carriers in India

As of now, LCCs possess more than 80% of the market share. Since 2009, the expansion of
Indian flight capacity has made it consistently one of the world’s fastest-growing markets. The
LCCs drove most of this growth. In total, the number of available departure seats has more than
doubled, swelling by 114.5% to 206 million in 2018. However, the increase in full-service
carriers (FSCs) like Air India has been relatively negligible, around 20%.
Ten years ago, the FSCs market dwarfed that of LCCs by almost 2.3 times. By 2018, the LCC
capacity had grown by an incredible 330%. Following the demise of Jet Airways in 2019, this
gap has further widened.
IndiGo and SpiceJet were at the forefront of growth, as the failure of India’s largest FSC created
a vacuum. IndiGo was the largest airline in India and received a majority of empty slots.
SpiceJet saw an unprecedented expansion, as it leased many B737s from Jet Airways. By the
end of 2019, IndiGo alone accounted for 50% of the market share. SpiceJet was now the second-
largest airline in India, with around 15% share in passenger numbers.
Moreover, after Jet Airways ceased its operations, there was an unequal amount of supply for
existing demand. Naturally, the load factors went up. In May 2019, SpiceJet registered the
highest load factor out of all airlines, at 94%. At the same time, IndiGo registered a load factor
of 90%.

IndiGo vs. SpiceJet

Although both the airlines were founded roughly at the same time, the two LCCs are miles apart
now. IndiGo experienced a confident rise that led to its dominance. On the other hand, SpiceJet
has gone through various ups and downs. It experienced uncertain periods of the financial crisis
and reduced fleet. However, with time it has grown into a much stronger airline capable of
competing with IndiGo.
In terms of fleet, the difference between the two is small and almost negligible. IndiGo operates
a large fleet of 264 aircraft that comprises of A320s, A321s and ATR 72-600. SpiceJet flies a
majority Boeing fleet of 112 B737s and Bombardier Q400. Although, IndiGo has an advantage
in terms of the number of aircraft, both the airlines follow a simple LCC model. Maintaining a
fleet of single aircraft type helps both the carriers in reducing maintenance costs associated with
different aircraft types.

69
In terms of destinations served, IndiGo has a slight edge over SpiceJet. It serves 63 destinations
in India and 24 abroad on 1500 daily flights. While SpiceJet flies 630 daily flights to 54 Indian
and 15 international destinations.
Passenger specific differences
Class booking
Being LCCs, both the airlines offer an all-economy seat layout. However, after SpiceJet inducted
some of the Jet Airways’ B737s, it introduced a premium service under the name of SpiceMax,
whereby passengers can obtain additional benefits including pre-assigned seats with extra
legroom. However, premium seats are only available on flights operated explicitly by ex-Jet
Airways aircraft.
IndiGo, on the other hand, has a standard seat layout across all of its aircraft. Nevertheless, it
allows services, such as a pre-assigned seat, multiple cancellations, and priority check-in, to its
passengers who are willing to pay a higher fare.
In-flight entertainment system
Until 2018, both the carriers offered no kind of Inflight entertainment systems (IFE). In August
2018, SpiceJet became the first Indian LCC to have an IFE called SpicEngage. The service was
accessible by any handheld device onboard any SpiceJet flight on domestic and international
sectors. Similarly, in September 2019, IndiGo announced its tie-up with SonyLIV, an on-
demand video app for providing its fliers with entertainment options on all domestic flights.
Punctuality
This aspect of an airline is a significant factor as far as the business-specific passenger demand is
concerned. In 2019, SpiceJet was one of the worst on-time performers out of all airlines. It was
on-time on only 74.7% of its flights. IndiGo, on the other hand, did much better in this aspect,
with 87.4% on-time performance.
Cancellations and Complaints
In terms of cancellation rate, IndiGo was the highest, with 0.95% of its flights being canceled.
Most of the cancellations were due to weather-related issues. It might be wrong, in this situation,
to assume that IndiGo is at fault. The higher cancellation percentage might have to do with

70
the diverse network and the large number of flights IndiGo operates. On the other hand, SpiceJet
saw many more complaints as compared to IndiGo.
Empty flights
If you are one of those who want to have a whole row to themselves, then IndiGo might be a
better choice. SpiceJet has consistently done much better than any other airline in India in terms
of load factors. You would be more likely to find empty seats on an IndiGo flight than a SpiceJet
flight.

Regional network
IndiGo and SpiceJet have different plans as far as their network is concerned. IndiGo relies on
very major, high demand routes. While SpiceJet is equally considerate of regional routes. On a
major sector like Delhi-Bengaluru or Delhi-Mumbai, IndiGo might be better placed to provide
you a convenient time and price. However, on many regional routes like Jalandhar-Jaipur,
SpiceJet has no competition.
Summary
Although both airlines showed impressive growth in 2019, a lot will depend on how they can
handle the current crisis. Since both the carriers are LCCs, there is little difference in terms of
airfare. As far as the rivalry is concerned, IndiGo surely is ahead in terms of size and network. In
terms of passenger experience, a lot depends on personal preference. There is no clear winner.

71
INTERGLOBE AVIATION (INDIGO) vs SPICEJET - Comparison Results CURRENT
VALUATIONS
INTERGLOBE
INTERGLOBE
AVIATION
AVIATION SPICEJET
(INDIGO)/
(INDIGO)
SPICEJET

P/E (TTM) x -11.2 -2.4 -

P/BV x 940.7 - -

Dividend
% 0.0 0.0 -
Yield

FINANCIALS

EQUITY SHARE DATA

INTERGLOB INTERGLOBE
E AVIATION SPICEJET AVIATION
(INDIGO) Mar-21 (INDIGO)/
Mar-21 SPICEJET

High Rs 1,822 108 1,687.8%

Low Rs 850 38 2,246.5%

Sales per share

Rs 380.4 86.1 442.0%
(Unadj.)

Earnings per
Rs -150.9 -17.1 880.2%
share (Unadj.)

Cash flow per

Rs -28.8 8.8 -325.3%
share (Unadj.)

Dividends per
Rs 0 0 -
share (Unadj.)

72
 EQUITY SHARE DATA

INTERGLOB INTERGLOBE
E AVIATION SPICEJET AVIATION
(INDIGO) Mar-21 (INDIGO)/
Mar-21 SPICEJET

Avg Dividend
% 0 0 -
yield

Book value
per share Rs 2.0 -43.5 -4.5%
(Unadj.)

Shares
outstanding m 384.91 600.94 64.1%
(eoy)

Bonus / Rights
- - -
/ Conversions

Price / Sales
x 3.5 0.8 414.7%
ratio

Avg P/E ratio x -8.9 -4.3 208.2%

P/CF ratio
x -46.5 8.2 -563.5%
(eoy)

Price / Book
x 678.2 -1.7 -40,436.6%
Value ratio

Dividend
% 0 0 -
payout

Rs
Avg Mkt Cap 514,297 43,808 1,174.0%
m

No. of `00
NA NA -
employees 0

Total Rs
32,955 6,853 480.9%
wages/salary m

73
 EQUITY SHARE DATA

INTERGLOB INTERGLOBE
E AVIATION SPICEJET AVIATION
(INDIGO) Mar-21 (INDIGO)/
Mar-21 SPICEJET

Avg.
Rs
sales/employe NM NM -
Th
e

Avg.
Rs
wages/employ NM NM -
Th
ee

Avg. net
Rs
profit/employe NM NM -
Th
e

INCOME DATA

Rs
Net Sales 146,406 51,714 283.1%
m

Rs
Other income 15,600 11,717 133.1%
m

Rs
Total revenues 162,006 63,432 255.4%
m

Rs
Gross profit -5,088 -279 1,825.7%
m

Rs
Depreciation 46,994 15,612 301.0%
m

Rs
Interest 21,698 6,125 354.2%
m

Rs
Profit before tax -58,181 -10,299 564.9%
m

Rs
Minority Interest 0 0 -
m

74
 INCOME DATA

Rs
Prior Period Items 0 0 -
m

Extraordinary Inc Rs
0 0 -
(Exp) m

Rs
Tax -116 0 -
m

Rs
Profit after tax -58,064 -10,299 563.8%
m

Gross profit margin % -3.5 -0.5 644.9%

Effective tax rate % 0.2 0 -

Net profit margin % -39.7 -19.9 199.1%

BALANCE SHEET DATA

Rs
Current assets 208,163 26,023 799.9%
m

Rs
Current liabilities 189,260 77,865 243.1%
m

Net working cap to

% 12.9 -100.2 -12.9%
sales

Current ratio x 1.1 0.3 329.1%

Inventory Days Days 325 122 266.5%

Debtors Days Days 5 23 24.1%

Rs
Net fixed assets 245,823 87,654 280.4%
m

Rs
Share capital 3,849 6,009 64.1%
m

Rs
"Free" reserves -3,091 -32,130 9.6%
m

75
 BALANCE SHEET DATA

Rs
Net worth 758 -26,121 -2.9%
m

Rs
Long term debt 3,816 3,027 126.1%
m

Rs
Total assets 453,986 113,676 399.4%
m

Interest coverage x -1.7 -0.7 246.8%

Debt to equity ratio x 5.0 -0.1 -4,342.9%

Sales to assets ratio x 0.3 0.5 70.9%

Return on assets % -8.0 -3.7 218.2%

-
Return on equity % -7,656.7 39.4
19,419.4%

Return on capital % -797.5 18.1 -4,412.8%

Exports to sales % 0 0 -

Imports to sales % 0 0 -

Exports (fob) Rs m NA NA -

Imports (cif) Rs m NA NA -

Fx inflow Rs m 16,818 9,299 180.9%

Fx outflow Rs m 110,542 20,035 551.7%

Net fx Rs m -93,724 -10,736 873.0%

CASH FLOW

Rs
From Operations -16,142 2,283 -707.0%
m

Rs
From Investments 31,970 2,122 1,506.8%
m

76
 CASH FLOW

From Financial Rs
-17,753 -4,367 406.5%
Activity m

Rs
Net Cashflow -2,102 33 -6,402.1%
m

SHARE HOLDING
Indian Promoters % 38.2 59.5 64.2%

Foreign
% 36.6 0.0 -
collaborators

Indian inst/Mut
% 23.1 2.2 1,051.4%
Fund

FIIs % 18.5 1.2 1,568.6%

ADR/GDR % 0.0 0.0 -

Free float % 25.2 40.5 62.2%

Shareholders 94,131 391,174 24.1%

Pledged promoter(s)
% 0.0 48.9 -
holding

77
 Conclusions
Key Things That Keep IndiGo Ahead Of SpiceJet
SpiceJet Ltd. has added the most capacity since the grounding of Jet Airways India Ltd. Yet, its
larger peer InterGlobe Aviation Ltd. remains better placed operationally in a market grappling
with falling yields, volatile costs and engine glitches.

Average fare per passenger per kilometre, or yields, have been falling in India because of higher
capacity addition, weak demand and competition in India. Crude prices and the dollar remained
fairly volatile. For an airline, cost volatility is high, as 60-70 percent of its expenses are dollar-
denominated and fuel accounts for more than a third of its costs.

Both SpiceJet and IndiGo, operated by InterGlobe Aviation, saw costs also rise due to grounding
of Boeing 737 Max aircraft and replacement of engines of Airbus A320neos, respectively.
IndiGo, India’s largest carrier, scores higher on two key parameters even as SpiceJet is looking
to catch up.

Costs
IndiGo’s cost per unit is lower than that of SpiceJet. On an average, in the last five quarters,
IndiGo’s cost per available seat kilometre remained lower by 17 percent, according to data
disclosed by the companies. That helped the airline to report profits or pare losses even as yields
declined.

These costs could come down as the share of fuel-efficient A320neos and A321 increases in its
fleet. To be sure, the aircraft are facing engine issues and IndiGo has said that Airbus has
delayed deliveries.

78
Cash

IndiGo has a stronger balance sheet with higher free cash on books worth Rs 8,700 crore and a
better liquidity ratio—cash-to-sales—of 26 percent. Usually, keeping a fifth of the sales as cash
is considered safe for airlines globally.
A stronger balance sheet is even more important for airlines as the operating environment is
volatile because of changing costs.

IndiGo, with three times the size of SpiceJet, doubled its share in the domestic market in the last
five years. Its international share doubled in just a year, and the airline plans to add more
capacity on global routes.

International operations act as a hedge against foreign currency movements and help lower costs.
That’s because fuel used for international flights does not attract any taxes and is cheaper outside
India.

IndiGo still aims to grow its overall capacity at more than 20 percent. But it lowered the forecast
twice in 45 days and now hopes to increase capacity by 22-23 percent in the ongoing fiscal
ending March, down from the original estimate of 30 percent.

79
What SpiceJet Is Banking On

SpiceJet is expecting the return of Boeing 737 Max aircraft, which were grounded because of
global safety issues. The planes are 15 percent more fuel efficient compared to SpiceJet’s
existing fleet and have 20 percent higher seating capacity

The airline expects the aircraft to be back in service by the end of January. Boeing, however, has
said that additional delays are possible as regulators around the world evaluate the 737 Max,
including its proposed software upgrade.

SpiceJet plans to negotiate higher discounts with Boeing, thus boosting sale and leaseback
income on aircraft delivery, said Edelweiss Securities in its note. The company also expects
compensation from Boeing for the grounded planes in the coming quarters.

SpiceJet has partly offset the 737 Max grounding by adding capacity, aided by the closure of Jet
Airways. The Ajay Singh-led airline increased its capacity by more than 50 percent in the second
quarter ended September—the most in last four years. That’s because, according to SBICAP
Securities, it received most of the slots vacated by Jet Airways.

80
SpiceJet also narrowed the gap with IndiGo on non-fuel costs. The difference fell to 20 percent
in the second quarter from 29-30 percent three months earlier. The management targets to bring
it down to 10 percent.

SpiceJet Narrows Cost Gap With IndiGo

SpiceJet’s non-fuel CASK is higher by (%)

81
And unlike IndiGo, the nation’s second-largest carrier has seen a stable management even as
founders of IndiGo were engaged in a public quarrel. While that didn’t result in any financial
impact on IndiGo, it remains an overhang.

Analysts are more bullish on SpiceJet. The average of 12-month price targets compiled by
Bloomberg implies a 32 percent upside of SpiceJet compared with 26 percent for IndiGo.

SpiceJet also has a higher percentage of ‘Buy’ ratings because of its lower valuations.

Why is IndiGo the best?

IndiGo is not only the most efficient low fare operator domestically but is also comparable
with global low cost airlines. We are constantly enhancing our engagement with our passengers
to augment their travel experience ..... Today, we are India's most preferred airline. At IndiGo,
low fares come with high quality.

82
 Bibliography/References
For Ratio analysis
[Link]
ratios/ratio-analysis/
[Link]
analysis/21780
[Link]
[Link]
Money [Link] for aviation industry analysis
[Link]
[Link]
for conclusion -
[Link]
Interglobe aviation
[Link]
Spicejet airlines
[Link]
Comparison of financial statement of both company
[Link]
INTERGLOBE-AVIATION-INDIGO-SPICEJET
For financial data
[Link]

Some valuable data share by our project guide

[Link]
[Link]
[Link]
[Link]
[Link]
[Link]

83