Brokerage firm Nuvama in its latest note has upgraded the target price for IndiGo (Interglobe Aviation) shares by 8%, also simultaneously raising its FY25E/26E EBITDAR by 5%/8%. Nuvama now has a target price of Rs 4,288 on IndiGo stock, this implies a 8% upside in Indigo share price from yesterday’s close of Rs 3,982.30 on the NSE.
The update from brokerage firm Nuvama comes in after the company in its conference call on April 30 said that the airline will start taking deliveries of Airbus A350 aircraft by 2027. “Exact configuration of aircraft to be finalised at a later stage; deliveries will start in 2027,” said CEO Pieter Elbers in the call.
Nuvama believes that IndiGo’s entry in the wide-body aircraft space via its order placement for 30 A350–900 (with right to add 70 more) aircraft shall strengthen its global network and enhance its share in the international segment. In addition to its A350s, IndiGo is already in the process of adding 50 A321 XLRs with deliveries likely to commence by 2025. A321 XLRs shall largely enhance Indigo’s position in mid-long haul markets.
“A likely duopolistic industry structure dominated by IndiGo and Air India bodes well, spurring pricing discipline and driving yields up in long term. Aggressive capacity addition, focus on high-margin international segment and robust demand shall drive PAX growth. We are raising FY25E/26E EBITDAR by 5%/8% and TP by 8% to INR4,288,” said Nuvama.