CITI has retained its buy rating on InterGlobe Aviation, the parent company of IndiGo, with a target price of ₹6,500. This implies a potential upside of approximately 14% from the current market price of ₹5,717.50.
The brokerage noted that the company’s Q1 performance came in below expectations, primarily due to weaker-than-anticipated yields. While April had started strong with year-on-year yield gains, several adverse developments led to a significant drop in May and June. As a result, IndiGo’s Q1 yield declined by 5% YoY, and the quarter saw high cancellations.
CITI highlighted management commentary pointing to severe disruptions caused by both domestic and global geopolitical events, including airport closures and restricted airspace. Additionally, an unfortunate aircraft incident in June further impacted passenger sentiment, leading to increased caution among flyers.
However, the outlook is stabilizing, according to the management. July has shown signs of recovery, and August–September are expected to deliver a year-on-year flat performance in unit revenue, setting up for a potential improvement in Q2.
Disclaimer: The views expressed in this article are based on brokerage reports and do not constitute investment advice. Please consult your financial advisor before making any investment decisions.
