IndiGo’s share price increased by 1.82% to Rs. 5,739.50 on November 6, 2023, driven by market optimism despite the airline reporting widening quarterly losses. The parent company, InterGlobe Aviation, saw its shares rise over 3% in early trading after announcing an upward revision in its capacity growth guidance for the current financial year.
The airline’s confidence in the long-term recovery of demand has led analysts from brokerages such as Motilal Oswal and PL Capital to maintain “Buy” ratings, with target prices ranging from Rs. 6,300 to Rs. 7,300. Analysts anticipate a robust recovery in demand, supported by capacity expansion and efficient operational practices within India’s growing air travel market.
Despite reporting a significant net loss of Rs. 2,582 crore for the July-September quarter of FY26, IndiGo’s share price reacted positively. The company’s losses were primarily attributed to foreign exchange fluctuations and a sharp increase in operating costs. However, excluding forex-related impacts, IndiGo reported a net profit of Rs. 104 crore, marking a positive shift from a loss of Rs. 754 crore in the same quarter the previous year.
Market Performance and Analyst Insights
IndiGo’s revenue from operations rose by 9.3% year-on-year to Rs. 18,555 crore, buoyed by strong passenger demand and improved yields. However, total expenses surged by 18.3% to Rs. 22,081 crore, with foreign exchange losses alone increasing twelvefold to Rs. 2,892 crore.
Brokerage firm Motilal Oswal Financial Services has set a target price of Rs. 7,300 per share, signaling an upside potential of nearly 30%. They emphasized that while immediate earnings may be constrained by forex volatility and rising costs, IndiGo’s strategic decision to expand its capacity, particularly on international routes, will contribute to future growth and mitigate currency exposure risks.
Similarly, PL Capital has maintained a “Buy” rating with a target price of Rs. 6,332, projecting a 12% compound annual growth rate (CAGR) in sales and an 11% CAGR in EBITDAR from FY25 to FY27. Analysts acknowledge the potential for stable pricing and capacity growth, although they caution that fluctuations in aviation turbine fuel prices and exchange rates remain significant risks.
Future Outlook and Investor Recommendations
IndiGo is viewed as one of the strongest contenders in India’s aviation sector, bolstered by its substantial market share, efficient cost structure, and expanding international footprint. The airline has revised its capacity growth guidance for FY26 from low double digits to mid-teens, reflecting its confidence in escalating passenger demand and long-term growth prospects.
Although earnings may remain under pressure in the near term due to forex losses and rising costs, the long-term outlook appears promising. Analysts recommend that investors with a medium- to long-term horizon consider holding or accumulating the stock during market dips, anticipating significant upside once cost pressures begin to subside and capacity expansion initiatives start to yield returns.
In 2025, IndiGo’s stock has appreciated over 26%, outperforming many peers in the aviation sector. The stock has reached a 52-week high of Rs. 6,232.50, driven by improved yields, robust passenger demand, and an optimistic growth outlook.
In summary, while IndiGo faces immediate challenges related to profitability, the airline’s proactive strategies and the overall positive trajectory of India’s air travel market position it well for future success.
