InterGlobe Aviation’s (IndiGo) share price reached a record high of ₹5,345 on April 15, reflecting strong buying in the Indian stock market. Year-to-date, the stock has increased by 17%, with gains of over 4% in April alone. IndiGo plans to expand its fleet, aiming for over 600 aircraft by FY30 and increasing its international capacity share from 25% to 40%. Motilal Oswal upgraded IndiGo to a buy rating with a target price of ₹6,550, citing favorable conditions like low crude prices and robust domestic demand. However, risks include potential delivery delays and market volatility.
The share price of InterGlobe Aviation (IndiGo) soared to a new all-time high during intraday trading on the BSE on Tuesday, April 15, fueled by significant buying in the Indian stock market. The InterGlobe share price commenced at ₹5,260.05 compared to its previous close of ₹5,151 and surged almost 4 percent to a peak of ₹5,345. By around 10:35 AM, the IndiGo share price was trading 2.66 percent up at ₹5,288.
IndiGo’s share price has been on an upward trajectory this year owing to the company’s robust growth potential. Year-to-date, the stock has appreciated by 17 percent. In April alone, the stock has risen more than 4 percent, following a 14 percent increase in March and a 4 percent gain in February.
IndiGo aims to expand its fleet by adding one aircraft every week until 2030, targeting a total aircraft capacity of over 600 by FY30. Additionally, the airline intends to boost its international capacity share from 25 percent to 40 percent. It plans to enhance its fleet with widebody aircraft starting in FY25 and XLRs beginning in FY26, enabling it to serve more international long-haul and mid-haul routes.
Motilal Oswal upgrades IndiGo to a buy
Brokerage house Motilal Oswal Financial Services has upgraded IndiGo stock to a buy rating with a target price of ₹6,550, based on a valuation of 10 times FY27E EV/EBITDAR. This target suggests a potential upside of 27 percent from the previous session’s close of ₹5,151 on April 11.
“We are upgrading IndiGo to a buy, as we believe that stable Brent crude prices amid ongoing geopolitical challenges and favorable domestic demand are positive indicators for the company. Our target price of ₹6,550 is based on 10 times FY27E EV/EBITDAR,” said Motilal Oswal.
“The stock currently trades at a P/E ratio of 20 times FY26 EPS and 9.7 times FY26E EV/EBITDA. We project a CAGR of 28 percent in EBITDA and 38 percent in PAT from FY25 to FY27E,” stated Motilal Oswal.
Motilal Oswal emphasized that IndiGo has adopted a markedly distinct operational strategy since Pieter Elbers took over as CEO in September 2022.
“Pieter Elbers brings over 30 years of experience in various roles at KLM Royal Dutch Airlines. His extensive background has enabled IndiGo to compete effectively with global leaders and consistently grow its domestic market share, though it also introduces a potential ‘key man’ risk,” remarked Motilal.
The brokerage further noted that IndiGo serves over 100 million passengers annually and adds an average of one aircraft each week. Through strategic partnerships with other airlines, it has raised its international share to nearly 28 percent of available seat kilometers (ASK) in FY25.
Additionally, Motilal highlighted that the company is intensifying its global presence through loyalty programs and proactive efforts in brand-building, while continuously optimizing flight schedules to improve reliability and attract more international travelers.
However, Motilal Oswal warned that delays in the delivery of wide-body aircraft and an increase in aircraft-on-ground (AOG) instances pose significant risks.
Furthermore, significant fluctuations in crude oil prices or the value of the rupee could adversely affect profit margins if costs cannot be passed on to consumers.
Moreover, a higher proportion of business-class seating or a premium fleet could undermine IndiGo’s cost advantage.
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