Shares of InterGlobe Aviation Ltd. (IndiGo), India’s largest airline, have already flown high — rising about 34% over the past year and delivering a staggering six-fold return in the last five years. But could there still be more runway ahead?
According to Morgan Stanley, the answer is yes. The brokerage has reiterated its “Overweight” rating on IndiGo shares with a price target of ₹6,502, implying a potential upside of about 10% from Tuesday’s closing price.
Morgan Stanley notes that IndiGo is currently trading at roughly 9x its FY27 EV/EBITDA, which is above its pre-Covid median of 8.5x, but still reasonable given the broader re-rating seen across the travel and tourism sector.
The brokerage highlights several factors that could drive a further re-rating in the stock:
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Reduced promoter stake sale overhang
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Tight near-term industry supply
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Industry consolidating into a two-player market
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Potential boost from business class expansion
Morgan Stanley also points to India’s under-penetrated aviation market and IndiGo’s bulk aircraft orders as positives, noting that its single fleet strategy keeps costs low. By 2030, it expects long-haul international flights to contribute around 7% of IndiGo’s mix, offering additional margin benefits due to lower fuel burn and better cost absorption on longer routes.
Importantly, the brokerage does not see much risk of regulatory intervention to cap airfares, given the government’s focus on supporting the sector.
Among 25 analysts tracking the stock, 21 have a “Buy” rating, while two each recommend “Hold” and “Sell.”
For investors looking at aviation, IndiGo continues to attract strong backing from brokerages thanks to its dominant market position, cost leadership, and growth prospects — though some caution remains given its recent sharp rally.
