Best Airlines Stocks in India: Airlines are an important part of most economies these days, however, their stocks have been shoddy investments. Their stock prices move in line with economic cycles and past downturns have led to airline bankruptcies and failures.
The airline industry was in distress due to the COVID-19 pandemic. The revenues and profits of companies in this sector took a hit and their share prices followed suit. Once vaccines had people traveling again, the industry started to recover.
In this article, we shall go through an overview of the airline industry and take a look at some of the Best Airlines Stocks in India. Keep reading to find out!
Industry Overview
The civil aviation industry in India has emerged as one of the fastest-growing industries during the last three years. It includes domestic and international airlines, non-scheduled air transport services (charter operators and air taxi operators), and air cargo services.
According to an IBEF report, the industry has fully recovered from the COVID-19 pandemic shock. In fact, the country is also expected to overtake China and the United States as the world’s third-largest air passenger market in the next ten years, by 2030, according to the International Air Transport Association (IATA).
Between FY16 and FY22, freight traffic increased at a CAGR of 2.52% from 2.70 MMT to 3.14 MMT. The Government has been working towards increasing the number of airports. India has 129 operational airports and it expects this number to go up to 190-200 by FY40.
The government has also allowed 100% Foreign Direct Investment (FDI) under the automatic route in scheduled air transport services, however, FDI of over 49% would require government approval.
The airline industry has faced multiple challenges, especially in its operating environment. The major ones include record-high aviation turbine fuel prices (ATF) and the depreciating rupee. These challenges affected the industry’s progress and performance.
Best Airlines Stocks in India
Indigo, Spice Jet, Air India, and Go Air dominate the Indian skies, however, not all of these companies are listed. In this article, we’ll take a look at some of the Best Airlines Stocks in India.
Best Airlines Stocks in India #1 – Interglobe Aviation
Interglobe Aviation Limited is India’s largest airline operator with a market share of 54.6% as of January 2023. The company operates flights under the brand ‘Indigo’, It is known for offering low fares, being on time, and delivering a courteous and hassle-free experience. With a fleet of 300 aircraft and growing, the airline connects people across the globe to a network of over 100 destinations worldwide. It flies to 75 destinations in India and internationally.
Revenue and Profitability
| Year | 2018 | 2019 | 2020 | 2021 | 2022 |
| Revenue (in Crores) | ₹23,020.89 | ₹28,496.77 | ₹35,756.00 | ₹14,640.63 | ₹25,930.93 |
| Profit (in Crores) | ₹2,242.32 | ₹157.25 | -₹233.68 | -₹5,806.43 | -₹6,161.85 |
| Net Profit Margin | 9.74 % | 0.55 % | – 0.65 % | – 39.66 % | – 23.76 % |
The company’s revenue grew from ₹ 14,640.63 in 2021 to ₹25,930.93 in 2022, at 77.12%. However, it grew merely at a CAGR of 3.02% from 2018 to 2022. Though the company has the highest market share in India, its profitability took a major hit due to the pandemic-induced lockdowns and travel restrictions. Its net profit margin initially decreased and then turned negative.
Key Metrics
| Particulars | Values | Particulars | Values |
| Face Value () | 10 | Dividend Yield (%) | 0% |
| Market Cap (₹ in Cr) | 73,726.24 | ROE (%) | NA |
| EPS (₹) | -160.25 | Promoter’s Holdings (%) | 71.92 |
| Stock P/E (TTM) | NA | Current Ratio | 0.9 |
| Industry P/E | -4.19 | Debt to Equity Ratio | -6.11 |
Interglobe Aviation has a market capitalization of ₹ 73,726.24 crores and is a large-cap company. Since its earnings are negative, it has negative earnings per share (EPS) of -160.25 and the price-to-earnings ratio is not applicable.
Moreover, the company’s return on equity is not determinable as of March 31, 2022, due to a negative net worth on account of losses during the current year and previous years. The airline has not paid any dividends in the past year.
Shareholding
The company’s promoters’ holdings have decreased over time. They held a 74.78% stake in the company in December 2021, however, they hold a 71.92% stake as per the shareholding pattern for December 2022. FIIs hold a 17.77% stake in it, followed by DIIs with 8.33% and retail investors with 1.98%.
Best Airlines Stocks in India #2 – SpiceJet
Spice Jet is principally engaged in the business of providing air transport services for the carriage of passengers and cargo. Its mission is to become India’s preferred low-cost airline, delivering the lowest air fares with the highest customer value, to price-sensitive customers. It continues to invest in differentiated products and services with an aim to make travel experiences safer, easier, and more memorable.
The company is constantly adding more destinations, expanding its fleet, and enhancing its services. Its cargo service business SpiceXpress is India’s largest cargo-operating airline. Its cargo network spans over 53 domestic and 12 international destinations.
Revenue and profitability
| Year | 2018 | 2019 | 2020 | 2021 | 2022 |
| Revenue (in Crores) | ₹7,760.13 | ₹9,121.48 | ₹12,374.57 | ₹5,171.45 | ₹6,603.59 |
| Profit (in Crores) | ₹557.21 | -₹302.41 | -₹936.57 | -₹1,029.89 | -₹1,744.27 |
| Net Profit Margin | 7.18 % | – 3.32 % | – 7.57 % | – 19.91 % | – 26.41 % |
The company’s revenue grew from ₹ 5,171.45 crores in 2021 to ₹ 6,603.59 in 2022, at 27.69%. However, it declined at a CAGR of 3.95% from 2018 to 2022. The company has the second-highest market share in India, however, it faced multiple challenges due to the pandemic. Therefore, its revenue and profit declined. As a result, its net profit margin also declined.
Key Metrics
| Particulars | Values | Particulars | Values |
| Face Value () | 10 | Dividend Yield (%) | 0% |
| Market Cap (₹ in Cr) | 1,824.19 | ROE (%) | NA |
| EPS (₹) | -29.01 | Promoter’s Holdings (%) | 59.39 |
| Stock P/E (TTM) | NA | Current Ratio | 0.25 |
| Industry P/E | -4.19 | Debt to Equity Ratio | -0.25 |
Interglobe Aviation has a market capitalization of ₹ 1,824.19 crores and is a small-cap company. Since its earnings are negative, it has negative earnings per share (EPS) of -29.01 and the price-to-earnings ratio is not applicable. Moreover, the company’s return on equity is not determinable as of March 31, 2022, due to a negative net worth on account of losses during the current year and previous years. The airline has not paid any dividends in the past year.
Shareholding
The company’s promoter holding has slightly decreased over time. They held a 59.46% stake in the company in December 2021, however, they hold a 59.39% stake as per the shareholding pattern for December 2022. However, the company’s promoters have pledged 47.32% of their stake. Retail investors hold a 39.95% stake in the company, followed by FIIs with 0.63% and DIIs with 0.03%
Best Airlines Stocks in India #3 – Global Vectra Helicorp
Global Vectra is the largest private helicopter company in India, providing professional, safe, and accident-free helicopter services for more than two decades. The spectrum of its operations encompasses support for India’s offshore oil and gas industry. It provides services like on-shore operations for State Governments (VIP flying), election flying, heli pilgrimage, and other rotary services.
The company is also a pioneer for helicopter operations in the conduct of specialized aerial geophysical surveys and most recently, for providing power industry support services.
It has a fleet of over 25, operated by highly experienced and well-trained aircrew and maintained by a large team of professionals. It has an unmatched safety record with over 260,000 hours of accident-free flying and safe carriage of over 4.6 million passengers.
Revenue and Profitability
| Year | 2018 | 2019 | 2020 | 2021 | 2022 |
| Revenue (in Crores) | ₹375.84 | ₹404.34 | ₹480.31 | ₹456.66 | ₹295.33 |
| Profit (in Crores) | ₹15.91 | -₹1.72 | ₹7.02 | ₹2.08 | -₹29.28 |
| Net Profit Margin | 4.23 % | – 0.42 % | 1.46 % | 0.46 % | – 9.91 % |
The company’s revenue and profit show a declining trend over the above period. Its revenue declined by 35.33% in the past year. The company made a profit in 2021, however, it suffered a massive loss of 29.28 crores in 2022. Its net profit margin also shows a declining trend.
Key Metrics
| Particulars | Values | Particulars | Values |
| Face Value () | 10 | Dividend Yield (%) | 0% |
| Market Cap (₹ in Cr) | 73.29 | ROE (%) | -12 |
| EPS (₹) | -3.89 | Promoter’s Holdings (%) | 75 |
| Stock P/E (TTM) | NA | Current Ratio | 0.48 |
| Industry P/E | NA | Debt to Equity Ratio | 1.37 |
Global Vectra Helicorp is a micro-cap company with a market capitalization of ₹ 73.29 crores. Since its earnings are negative, it has negative earnings per share (EPS) of -3.89 and the price-to-earnings ratio is not applicable. Moreover, the company’s return on equity is not determinable as of March 31, 2022, due to a negative net worth on account of losses during the current year and previous years. The company has not paid any dividends in the past year.
Shareholding
Global Vectra Helicorp’s promoter holding has remained constant at 75% over the past five quarters. Further, they do not have a pledge against their holdings. Retail investors hold the remaining 25% stake in the company.
Bonus: Air India
Air India is one of the largest airlines in India and was founded in 1932 by J R D Tata. As India’s oldest airline, Air India has a long-standing history of serving the nation and its people, while leaving its mark on the global aviation map. Initially, it functioned as a mail carrier but grew quickly in its operational capacity and began carrying passengers as well. Later, it was nationalized in the year 1953.
The government in January 2022 transferred 100% of the company’s shares and management control to the Tata Group. In April 2022, the company was sixth in terms of on-time performance, and by September has improved that to 3rd overall, behind Vistara and AirAsia, according to data from the Directorate General of Civil Aviation (DGCA). Air India is currently going through a turnaround.
In Closing
In this article, we took a look at some of the Best Airlines stocks in India and understood the industry at large. While there are many major airlines in India, not all of them are listed. We saw that Indigo currently commands the highest market share in the industry, and Air India was taken over by the Tata Group in January 2022.
The financials of most of the companies in this sector are shaken due to the pandemic, rise in ATF prices, and escalating operational costs. That’s all for this article, folks. We hope to see you around and happy investing until next time!
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