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Intermediate

Case Study: IndiGo, Analyzing a Capital Intensive Business

Indian aviation is a graveyard: Kingfisher, Jet Airways and Go First all collapsed while passenger traffic kept growing. IndiGo went the other way and became the dominant domestic carrier. This case study takes InterGlobe Aviation apart to show how a capital intensive, cyclical, commodity-exposed business can still create shareholder value, and where it can go wrong. You will learn the airline vocabulary (ASK, load factor, yield, RASK, CASK), how sale and leaseback funds the fleet, what Ind AS 116 did to the balance sheet, why fuel prices and the rupee matter so much, and how shocks like COVID and engine groundings hit the numbers. Then you will value it the way analysts do and walk away with a checklist you can apply to any capital heavy business on NSE, using annual reports and screener.in.

IndiGoAirline EconomicsCapital Intensive BusinessesUnit EconomicsLease AccountingCase Study
MODULES
5
DURATION
~2.25 hrs
TRACK
Value Investing

What You'll Master

Why airlines as an industry tend to destroy capital, and what IndiGo did differently
How to read airline unit economics: ASK, RPK, load factor, yield, RASK and CASK
How sale and leaseback financing works and why it shaped IndiGo's growth
What Ind AS 116 changed in lease-heavy balance sheets and how to adjust for it
How fuel, currency and external shocks flow through a capital heavy P&L
How to value a cyclical, capital intensive business and a checklist to analyse any such company
Access Level
LEARNER
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Everything included
Full Text Playbooks
Actionable Exercises
Mobile Reading Mode
Lifetime Updates

Curriculum Breakdown

Chapter 1: An Industry That Eats Capital

3 Lessons
▶
Why Airlines Are So Hard to Make Money In9 min read
Preview
▶
A Graveyard of Indian Airlines: Kingfisher, Jet and Go First10 min read
▶
How IndiGo Was Built: One Aircraft Type, On Time, Low Cost9 min read

Chapter 2: Speaking Airline, the Unit Economics

3 Lessons
▶
ASK, RPK and Load Factor: The Airline Vocabulary9 min read
▶
Yield, RASK and CASK: Where the Margin Lives10 min read
▶
Fuel, the Rupee and the Costs IndiGo Cannot Control9 min read

Chapter 3: The Balance Sheet of a Capital Intensive Business

4 Lessons
▶
Sale and Leaseback: How IndiGo Funds Its Fleet10 min read
▶
Ind AS 116: When Leases Moved onto the Balance Sheet10 min read
▶
Cash, Lease Liabilities and Net Worth: Reading IndiGo's Balance Sheet10 min read
▶
Reading IndiGo on screener.in9 min read

Chapter 4: Shocks, Cycles and Valuation

2 Lessons
▶
Surviving Shocks: COVID, Engine Groundings and Operational Crises10 min read
▶
Valuing a Cyclical, Capital Intensive Business11 min read

Chapter 5: What to Take Away

2 Lessons
▶
A Checklist for Analysing Any Capital Intensive Business9 min read
▶
The Limits of the IndiGo Story7 min read