IndiGo share price target: Analysts at Elara Capital have decreased share price target for IndiGo operator InterGlobe Aviation shares by Rs 1221 from Rs 7,241, while maintaining a 'buy' stance.
The revised target implies an upside of about almost 24 per cent, indicating that the brokerage continues to see value in the stock despite near-term operational challenges.
According to analysts, the target price revision is primarily driven by lower capacity and earnings assumptions in the near term. However, the brokerage believes that recent disruptions do not alter IndiGo's long-term growth story and that the overall risk-reward remains attractive.
The brokerage has also lowered its valuation multiple for the airline to 10.5 times FY27 estimated EV/EBITDA from 11.5 times earlier, reflecting the recent reset in the sector and company-specific headwinds.
On operational issues, Elara said the ongoing pilot shortage at IndiGo is likely to be temporary, lasting around two to four quarters, and is largely company-specific rather than a broader industry concern. The brokerage noted that a planned 10 per cent cut in winter capacity could actually support airfares, pointing out that historically, airfares tend to rise by about 1 per cent for every 1 per cent reduction in capacity.
Importantly, Elara highlighted IndiGo's strong position on fleet expansion.
The airline remains the only carrier in India with assured aircraft deliveries of around 50 planes annually over the next four to five years, which provides long-term visibility on growth and capacity addition, according to the brokerage.
Overall, the brokerage believes that while near-term earnings may remain under pressure, IndiGo's structural advantages, dominant market position and long-term growth prospects justify the continued Buy recommendation.
IndiGo Share Price Target
The brokerage has recommended buying the aviation stock with decreasing its target from Rs 7,241 to Rs 6,020, a decline of Rs 1221 or 16.86 per cent. This new target suggests an upside potential of 23.84 per cent from Friday's closing.
Shares surge over 3% today
Shares of IndiGo on Monday surged as much as 3.15 per cent, hitting an intra-day high of Rs 5014.40 apiece on the BSE.
IndiGo vs BSE Sensex: Past performance
IndiGo's stock performance has been mixed across time periods. Over the past one month, the stock has declined sharply by 15.8 per cent.
In the last six months, the aviation stock slipped by 5.48 per cent. The stock remains positive on a longer-term basis, with a year-to-date gain of 8.32 per cent.
Over the past one year, IndiGo shares have risen by 12.2 per cent, while on a five-year horizon, the stock has delivered strong returns of nearly 200 per cent.
Here is how the avaition stock fared against the headline index -- BSE Sensex:
| Duration | IndiGo stock (%) | BSE Sensex (%) |
| 1 Week | 0.95 | 0.14 |
| 2 Weeks | -14.11 | -0.49 |
| 1 Month | -15.8 | 0.78 |
| 3 Months | -13.12 | 4.2 |
| 6 Months | -5.48 | 5.06 |
| YTD | 8.32 | 8.56 |
| 1 Year | 12.2 | 3.76 |
| 2 Years | 70.54 | 19.22 |
| 3 Years | 146.96 | 37.91 |
| 5 Years | 199.99 | 84.22 |
| 10 Years | 319.88 | 236.58 |
(Disclaimer: The above article is meant for informational purposes only, and should not be considered as any investment advice. ET NOW DIGITAL suggests its readers/audience to consult their financial advisors before making any money related decisions.)
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