As InterGlobe Aviation, parent firm of India’s largest airline IndiGo, reported its highest ever quarterly net profit at Rs 1,203.14 crore for April-June, its board discussed addressing some of the issues raised by promoter and co-founder Rakesh Gangwal that are at the centre of the feud between him and his co-promoter Rahul Bhatia.
The board also discussed appointment of a woman independent director to comply with regulatory norms. In a post-earnings conference call, the airline’s CEO Ronojoy Dutta said that the board meeting will continue on Saturday, and the directors will discuss further matters.
“I just want to confirm that we had a board meeting today and this board meeting will continue tomorrow as well. The board in its meeting today had a discussion on the appointment of an independent woman director to the board of the company. Of course, we have to take the step to comply with the law but in order to induct an independent woman director, we need to change the Articles of Association (AoA) of the company which now needs to be amended. We are working on this and a final decision on this subject will be made tomorrow,” Dutta said during the call.
“The board is having a … discussion on all issues. We obviously had a number of committee meetings today including audit committee and the board covered a whole range of issues and will convene to do so tomorrow. I mentioned the independent woman director issue because it is a compliance issue with the law so it is very urgent for us to resolve this and we hope to have a solution tomorrow,” Dutta added.
Currently, there is only one woman director on IndiGo’s board — Rohini Bhatia — who is the wife of Rahul Bhatia. Regulations stipulated by the Securities and Exchange Board of India (Sebi) require at least one woman independent director in the top 500 listed entities by market capitalisation by April 1, 2019 and in the top 1,000 listed entities by April 1, 2020.
IndiGo’s management also said that the company has submitted its response to Sebi, which sought explanations over Gangwal’s complaints alleging serious corporate governance lapses at the company. In addition to this, the company will respond to clarifications sought by the Ministry of Corporate Affairs by end of next week, Dutta said, adding that there was no disagreement between the promoters over the airline’s growth strategy. Fuelled by higher passenger revenues during the June-quarter partially helped by the fall of Jet Airways, the company’s net profit increased 43 times year-on-year. InterGlobe Aviation had reported a profit after tax of Rs 27.79 crore in the year-ago period. Total income climbed to Rs 9,786.94 crore for the June quarter from Rs 8,259.69 crore in the same period a year ago, according to a regulatory filing.
“Strong passenger revenues along with a sharp improvement in cargo performance were key drivers to this improved profitability,” he said.
Its revenue from operations jumped nearly 45 per cent to Rs 9,420 crore. Yield, which is an indicator of revenue earned for every kilometre flown, jumped to 12.8 per cent in the latest quarter.
Even as the fall of Jet Airways allowed airlines to rationalise fares that translated into higher fares during the three-month period, Dutta pointed out that meaningful impact of Jet Airways is unlikely to continue as all airlines have replaced the capacity vacated by Jet. “Unfortunately, we are witnessing some lower fares in the 0-15 day booking window and expect this to add some pressure to our unit revenues in the second quarter,” he said.
Friday, InterGlobe Aviation’s share ended trading 0.32 per cent higher than its previous close at Rs 1,463.35 on the BSE.