Shares of InterGlobe Aviation, the parent company of IndiGo, surged on Thursday after HSBC maintained its ‘buy’ rating and raised its target price to Rs 5,165 per share. The brokerage firm remains bullish on the airline’s launch of business class services on key metro routes, citing its potential to reduce leakage of corporate traffic and strengthen positioning.
HSBC noted that while the launch may not be margin accretive in the near term, it could place IndiGo in a strong competitive position in the long term. The brokerage firm also highlighted the airline’s competitive launch price for business class seats and its potential to make up for missing features from its premium product.
IndiGo’s shares rose as much as 4% before trading 3.18% higher at Rs 4,436.7 apiece, outperforming the benchmark Nifty 50’s 0.2% gain. The stock has risen 79% in the last 12 months and 49% on a year-to-date basis, with a total traded volume of 3.2 times its 30-day average.
The launch of business class services marks a significant move by IndiGo to break Vistara and Air India’s monopoly in the premium segment. HSBC’s positive outlook and target price upgrade have boosted investor sentiment, making IndiGo a stock to watch in the coming quarters.
