UBS has maintained its buy rating on InterGlobe Aviation with a target price of ₹6,170 per share, acknowledging near-term headwinds while remaining confident about the airline’s medium- to long-term growth prospects.
UBS said IndiGo delivered a decent Q3FY26 performance, despite disruptions in early December, reflecting operational resilience. The brokerage highlighted that management expects ASK growth of around 10% in Q4FY26, with the bulk of incremental capacity coming from international expansion, reinforcing IndiGo’s strategic push beyond domestic routes.
However, UBS flagged some near-term cost pressures. The company has raised its guidance for Q4FY26 CASK (excluding fuel and FX), which is now expected to increase in the mid-to-high single-digit range, compared with the earlier outlook of low single-digit growth. This upward revision reflects higher operating costs as capacity ramps up and network complexity increases.
In addition, management guided for yields to moderate in the early to mid-single-digit range, coming off a relatively high base in Q4FY25. UBS views this as a natural normalisation rather than a structural concern.
Fleet expansion remained a key positive, with 24 aircraft inducted during the quarter, of which 18 were inducted via GIFT City, helping optimise financing and leasing costs. UBS believes this supports IndiGo’s long-term cost competitiveness and balance sheet flexibility.
Despite near-term margin pressure, UBS remains constructive, citing IndiGo’s dominant market position, disciplined expansion strategy and growing international network.
Disclaimer: The views and recommendations above are those of UBS. Business Upturn does not endorse them. Please consult a financial advisor before making investment decisions.
