ICRA has highlighted that IndiGo’s sizeable liquidity buffer provides a strong cushion to absorb near-term earnings pressure arising from operational disruptions, cost inflation and currency headwinds. The rating agency expects leverage metrics to temporarily weaken but remain manageable over the medium term, supported by robust cash, healthy market share and resilient demand.
ICRA, in its latest update on InterGlobe Aviation Ltd (IndiGo), flagged that profitability in the current fiscal will stay under pressure due to operational issues and rupee depreciation against the dollar, which elevates costs for the carrier. However, the agency underscored IndiGo’s strong liquidity position, with unencumbered cash and equivalents of about ₹38,500 crore as of September 30, 2025, offering significant comfort.
While ICRA expects IndiGo’s leverage, measured by net debt (including lease liabilities) to EBITDAR, to breach its negative trigger of 2.5 times in FY26, it does not see this stress persisting beyond the near term in its base case. The airline’s dominant domestic market share, efficient cost structure and steady demand for air travel underpin its ability to navigate the current turbulence.
Key Highlights
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Large liquidity buffer with unencumbered cash and equivalents of ~₹38,500 crore as on September 30, 2025.
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Near-term profitability pressured by operational disruptions and rupee depreciation versus the dollar.
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Net debt/EBITDAR in FY26 likely to breach 2.5x negative trigger, but not expected to remain elevated beyond one fiscal.
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Strong balance sheet, cost discipline and leading market share provide resilience against earnings volatility.
Sources: ICRA rating update on InterGlobe Aviation Ltd, ICRA rationales and financial disclosures.