IndiGo Stock Price: Despite the operational problems of the past few days, the brokerage’s view on IndiGo’s stock is quite bullish…
highlights
- Shares of IndiGo’s parent company InterGlobe Aviation witnessed sharp selling after reporting a huge decline in profits in the December quarter.
- Shares of InterGlobe Aviation fell 4% on Friday, January 23.
- Despite the good number of passengers, some big expenses hit IndiGo’s earnings hard, the impact of which was clearly visible in the stock market on Friday.
Around 11.22 am, Indigo shares were trading at Rs 4761, down 3.11%. There is a stir in the stock after all the problems in flight operations in December. This stock has fallen by about 16 percent in 3 months.
Indigo stock’s 14-day RSI is 44.8, indicating neutral momentum. The stock is trading below 6 out of 8 major moving averages, indicating weakness. However, it is above the 5-day and 10-day moving averages, indicating support in the short-term.
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What is the brokerage’s view?
Despite the figures seen in the results and the operational problems of the past few days, the brokerage’s view on IndiGo’s stock is quite bullish.
While stating its view on InterGlobe Aviation, brokerage Goldman Sachs has maintained buy rating with a target price of Rs 6,000 (earlier Rs 5,600). Goldman Sachs noted that operations remained healthy despite the disruptions. Management’s growth guidance is encouraging, although higher costs remain a concern.
Goldman Sachs said earnings were lower than expected, mainly due to lower aircraft fares. Management guided for approximately 10% annual ASK growth in Q4, indicating an improved capacity outlook. There remains some uncertainty in the near term due to higher Q4 costs and lack of clarity on FY27 capacity growth.
The brokerage said that despite higher costs in the short term, IndiGo’s market position and long-term equity story remain positive. According to the company, this sharp decline in profits was mainly due to exceptional items, including costs related to new labor laws, operational disruptions and currency fluctuations.
Morgan Stanley Overweight Rating
Morgan Stanley has given Overweight rating on the stock with a price target of Rs 6,498. Morgan Stanley notes that IndiGo’s F3Q PBT was 18% ahead of estimates. The company lowered Q4 capacity guidance and raised CASK outlook. The company expects F4Q26 capacity growth of 10% YoY.
Morgan Stanley said IndiGo is taking steps to improve its operations and is back at its full operational capacity.
How were the results of Indigo?
InterGlobe Aviation, which runs budget carrier IndiGo, presented its Q3FY26 results on January 22. The company earned a consolidated net profit of Rs 550 crore in Q3FY26, compared to Rs 2,449 crore in the same quarter last year. The sharp decline was primarily driven by certain items, including expenses related to implementation of new labor laws, operational disruptions and currency fluctuations.
InterGlobe Aviation said that if certain items are removed, the company’s profit during the quarter was much better. Specific expenses included Rs 969 crore related to the new labor code, Rs 577 crore due to operational disruptions, and Rs 1,035 crore due to currency fluctuations related to dollar-based liabilities.
After adjusting for these items, the company reported underlying net profit of Rs 3,131 crore, while profit after tax (PAT) stood at Rs 3,846 crore as of Q3FY25. Quarter-on-quarter, IndiGo made a strong recovery. The airline had reported a loss of Rs 2,582 crore in Q2FY26, while revenue rose 26% to Rs 24,500 crore from Rs 18,555 crore in the September quarter.
Statement from CEO Peter Albers
CEO Peter Albers said that between December 3 and 5, many flights were canceled due to large-scale operational problems. He said that despite these challenges, IndiGo recorded a topline of about Rs 245 billion, which represents a growth of 7%. Reported profit was about Rs 5 billion and underlying profit excluding extraordinary items was Rs 31 billion.
Albers said that the airline served about 32 million passengers during the quarter, while this number stood at 124 million in calendar year 2025.
Disclaimer: This article is for informational purposes only and should not be construed as investment advice in any way. ET NOW Swadesh recommends its readers and viewers to consult their financial advisors before taking any money-related decisions.
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