InterGlobe Aviation (NSE:INDIGO) Has A Pretty Healthy Balance Sheet

David Iben put it well when he said, 'Volatility is not a risk we care about. What we care about is avoiding the permanent loss of capital.' So it seems the smart money knows that debt - which is usually involved in bankruptcies - is a very important factor, when you assess how risky a company is. Importantly, InterGlobe Aviation Limited (NSE:INDIGO) does carry debt. But is this debt a concern to shareholders?

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When Is Debt A Problem?

Debt is a tool to help businesses grow, but if a business is incapable of paying off its lenders, then it exists at their mercy. In the worst case scenario, a company can go bankrupt if it cannot pay its creditors. While that is not too common, we often do see indebted companies permanently diluting shareholders because lenders force them to raise capital at a distressed price. Of course, the upside of debt is that it often represents cheap capital, especially when it replaces dilution in a company with the ability to reinvest at high rates of return. When we think about a company's use of debt, we first look at cash and debt together.

What Is InterGlobe Aviation's Net Debt?

You can click the graphic below for the historical numbers, but it shows that InterGlobe Aviation had ₹18.0b of debt in March 2025, down from ₹18.9b, one year before. However, its balance sheet shows it holds ₹437.4b in cash, so it actually has ₹419.4b net cash.

How Healthy Is InterGlobe Aviation's Balance Sheet?

We can see from the most recent balance sheet that InterGlobe Aviation had liabilities of ₹342.2b falling due within a year, and liabilities of ₹722.6b due beyond that. Offsetting this, it had ₹437.4b in cash and ₹7.40b in receivables that were due within 12 months. So it has liabilities totalling ₹620.0b more than its cash and near-term receivables, combined.

This deficit isn't so bad because InterGlobe Aviation is worth a massive ₹2.08t, and thus could probably raise enough capital to shore up its balance sheet, if the need arose. But we definitely want to keep our eyes open to indications that its debt is bringing too much risk. Despite its noteworthy liabilities, InterGlobe Aviation boasts net cash, so it's fair to say it does not have a heavy debt load!

See our latest analysis for InterGlobe Aviation

We saw InterGlobe Aviation grow its EBIT by 3.0% in the last twelve months. That's far from incredible but it is a good thing, when it comes to paying off debt. When analysing debt levels, the balance sheet is the obvious place to start. But it is future earnings, more than anything, that will determine InterGlobe Aviation's ability to maintain a healthy balance sheet going forward. So if you're focused on the future you can check out this free report showing analyst profit forecasts.

Finally, while the tax-man may adore accounting profits, lenders only accept cold hard cash. While InterGlobe Aviation has net cash on its balance sheet, it's still worth taking a look at its ability to convert earnings before interest and tax (EBIT) to free cash flow, to help us understand how quickly it is building (or eroding) that cash balance. Happily for any shareholders, InterGlobe Aviation actually produced more free cash flow than EBIT over the last three years. That sort of strong cash generation warms our hearts like a puppy in a bumblebee suit.

Summing Up

While InterGlobe Aviation does have more liabilities than liquid assets, it also has net cash of ₹419.4b. The cherry on top was that in converted 204% of that EBIT to free cash flow, bringing in ₹217b. So we are not troubled with InterGlobe Aviation's debt use. Over time, share prices tend to follow earnings per share, so if you're interested in InterGlobe Aviation, you may well want to click here to check an interactive graph of its earnings per share history.

If, after all that, you're more interested in a fast growing company with a rock-solid balance sheet, then check out our list of net cash growth stocks without delay.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.