Shares of InterGlobe Aviation (IndiGo) remain in focus as multiple brokerages have shared their views on the company’s growth prospects. While Citi and Jefferies have given a Buy rating, Nuvama has taken a Hold stance, citing positive but measured expectations.
Citi on InterGlobe: Buy, target price ₹5,200
Citi remains bullish on IndiGo, highlighting strong demand momentum in the Indian aviation market. The brokerage believes IndiGo, with its large fleet and strong order book, is well-positioned to capitalize on air traffic growth.
Key enablers include cost optimization strategies, which will help IndiGo maintain its competitive pricing. Management is also working on bringing a greater portion of maintenance and engineering activities to India, a move expected to enhance efficiency and reduce costs in the long run.
Nuvama on InterGlobe: Hold, target price ₹4,768
Nuvama remains cautious yet positive on IndiGo, maintaining a Hold rating with a target price of ₹4,768. The brokerage’s key takeaways from the analyst day meeting include:
- Passenger traffic (PAX) in India is expected to double to 510 million by FY30, up from 242 million in FY25.
- IndiGo’s ASKMs (Available Seat Kilometers) are projected to grow in early double-digits in FY26 due to continued fleet expansion.
- Q4FY25 is likely to outperform expectations due to strong passenger revenue per available seat kilometer (PRASK) growth, which rose 17% YoY.
- IndiGo is focusing on expanding its international market, with ASKM share in global routes expected to reach 40% by FY30, up from 28% in FY25.
- The company maintains one of the lowest CASK (cost per available seat kilometer) globally, excluding fuel and forex at USD 3.37 (Oct’23–Sep’24).
- EPS estimates for FY25-27 have been raised by 8-13%, reflecting a positive near-term outlook.
Jefferies on InterGlobe: Buy, target price ₹5,700
Jefferies remains the most optimistic on IndiGo, assigning a Buy rating with a target price of ₹5,700. The brokerage expects strong Q4 performance, driven by higher pricing and passenger growth.
For FY26, IndiGo is projected to continue its double-digit capacity growth, in line with FY25. One of the key growth drivers will be international expansion, with the company aiming to tap into the rising demand for corporate and leisure travel globally.
Additionally, IndiGo’s growing free cash flow (FCF) has enabled management to focus on prudent capital allocation, ensuring a balance between aggressive expansion and external risk mitigation.
Verdict: Mixed views with long-term growth optimism
While Jefferies and Citi recommend a Buy on IndiGo, Nuvama remains cautious with a Hold rating, waiting for a better entry point. The Indian aviation market’s rapid expansion, IndiGo’s strong fleet growth, and cost control measures remain key positives. However, potential risks include macroeconomic headwinds, competitive pricing pressures, and fuel cost volatility.
Investors should watch for Q4FY25 performance and international expansion progress to gauge the stock’s trajectory in the coming months.
(Disclaimer: This article is for informational purposes only and does not constitute investment advice.)