Shares of InterGlobe Aviation Ltd, operator of India’s largest airline IndiGo, declined nearly 2.50% in early trade, tracking investor reaction to the company’s Q3 FY26 financial results announced after market hours. The stock came under pressure as the airline reported a sharp fall in quarterly profit despite continued growth in revenue.

In the December quarter, IndiGo reported a consolidated net profit of around ₹550 crore, down nearly 78% year-on-year from ₹2,449 crore in the corresponding period last year. The company attributed the decline largely to exceptional expenses exceeding ₹1,500 crore, along with higher operating and finance costs.

Revenue Grows, Margins Under Pressure

Revenue from operations rose around 6% year-on-year to approximately ₹23,470 crore, supported by higher passenger traffic and incremental capacity addition. During the quarter, IndiGo operated an average fleet of over 360 aircraft and carried more than 30 million passengers, maintaining its leadership position in the domestic aviation market.

However, operating expenses increased sharply. The airline flagged one-time employee-related costs linked to labour code implementation, foreign exchange losses, and operational disruptions during December, including flight cancellations and delays, which together impacted profitability. Fuel costs, aircraft lease rentals and maintenance expenses also remained elevated during the quarter.

IndiGo’s EBITDAR margin narrowed during the quarter as cost escalation outpaced revenue growth, while the load factor softened marginally compared with the year-ago period.

Market Focus Shifts To Cost Normalisation

The sharp decline in profit overshadowed revenue growth and led to early selling pressure in the stock. Investors are now closely watching management guidance on cost normalisation, recovery from December disruptions and capacity deployment over the coming quarters.

Despite near-term pressure, IndiGo continues to hold the largest share of India’s domestic aviation market, with its performance closely tied to demand trends, fuel prices and currency movements.