Bank of America (BofA Securities) has reiterated its buy rating on InterGlobe Aviation, operator of IndiGo, with a slightly reduced target price of ₹6,600 per share after incorporating the financial impact of recent flight disruptions. The brokerage said cancellations had eased significantly after regulators temporarily relaxed pilot rostering rules, enabling the airline to restore capacity more efficiently and stabilise operations heading into the peak travel period.
However, BofA cut its Q3 net income estimates by around 9% owing to the revenue loss from cancellations and the upward pressure on unit costs. The firm highlighted that fixed expenses and disruption-related costs are set to raise cost-per-available-seat-kilometre (CASK), while tighter rostering rules scheduled for implementation from 2026 may increase pilot requirements and labour costs by nearly 10% over the medium term. As a result, the brokerage lowered its FY26–28 earnings estimates by 7%, though it emphasised that IndiGo’s long-term demand fundamentals remain intact, supported by strong domestic air traffic trends and capacity constraints across the wider industry.
Disclaimer: The views and recommendations above are those of Bank of America Securities. Business Upturn does not endorse them. Please consult a financial advisor before making investment decisions.
