IndiGo shares a buy despite rising ATF prices, likely Q2 hit? Target price
ICICI Securities said it has downgraded its earnings estimates for FY27. However, that does not change its thesis on IndiGo. This correction could be a buying opportunity, the domestic brokerage said in its latest note.
- Sep 1, 2026,
- Updated Sep 1, 2026 2:27 PM IST
ICICI Securities has maintained a 'Buy' rating on InterGlobe Aviation Ltd (IndiGo) even as air turbine fuel (ATF) prices have been higher for longer now, with an impact likely in the September quarter extending into the December quarter, basis August trend.
ICICI Securities said it has downgraded its earnings estimates for FY27. However, that does not change its thesis on IndiGo. This correction could be a buying opportunity, the domestic brokerage said in its latest note.
"At this juncture, the industry has consolidated, travel demand is high (over 20 per cent yield hike in Q1 and 25 per cent yield hike guidance in Q2 is noteworthy validation to that end), and with stable currency incrementally, we also expect non-fuel CASK to stabilise hereon at an annual level," ICICI Securities said,
The brokerage said IndiGo’s 2030 outlook, wherein it may have an annual capacity of 300 billion ASKs, implying mid-teens capacity growth compounded annually, 20 crore passengers and over 3,000 daily departures, also improves medium-term earnings visibility and in turn provides constructive valuation guidance for investors.
ICICI Securities said it has factor in Revenue per Available Seat Kilometer (RASK) of Rs 5.74 and Rs 5.54 for FY27 and FY28.
"We maintain BUY with an unchanged target price of Rs 6,020, based on 25x (unchanged) FY28E EPS of Rs 241 (post-full tax). Key risks include a volatile geopolitical environment or business disruptions akin to those in FY26. However, its strong competitive position hedges that risk significantly, as already demonstrated multiple times," he brokerage said.
Systematically, said ICICI Securities, lower passenger load dactor (PLF) and higher fares have been the model for some time. Domestic market share of IndiGo has increased in July to 67.4 per cent against 66.3 per cent in June 2026 YoY. It was 64.9 per cent in May and 65 per cent in April.
ICICI Securities said International market share of IndiGo significantly decreased to 50.1 per cent in July against 54.7 per cent in June against 52.9 per cent in May.
"This has to do with restoration of international routes of Air India. Domestic ASK growth has decreased by 9.5 per cent MoM in July. International ASK growth has increased by 8.2 per cent MoM in July. Domestic PLFs have decreased for most of the airlines (259 bps for Air India, 374 bps for SpiceJet, 270bps for IndiGo, 23bps for Akasa Air in Jul’26)," it noted.
ICICI Securities has maintained a 'Buy' rating on InterGlobe Aviation Ltd (IndiGo) even as air turbine fuel (ATF) prices have been higher for longer now, with an impact likely in the September quarter extending into the December quarter, basis August trend.
ICICI Securities said it has downgraded its earnings estimates for FY27. However, that does not change its thesis on IndiGo. This correction could be a buying opportunity, the domestic brokerage said in its latest note.
"At this juncture, the industry has consolidated, travel demand is high (over 20 per cent yield hike in Q1 and 25 per cent yield hike guidance in Q2 is noteworthy validation to that end), and with stable currency incrementally, we also expect non-fuel CASK to stabilise hereon at an annual level," ICICI Securities said,
The brokerage said IndiGo’s 2030 outlook, wherein it may have an annual capacity of 300 billion ASKs, implying mid-teens capacity growth compounded annually, 20 crore passengers and over 3,000 daily departures, also improves medium-term earnings visibility and in turn provides constructive valuation guidance for investors.
ICICI Securities said it has factor in Revenue per Available Seat Kilometer (RASK) of Rs 5.74 and Rs 5.54 for FY27 and FY28.
"We maintain BUY with an unchanged target price of Rs 6,020, based on 25x (unchanged) FY28E EPS of Rs 241 (post-full tax). Key risks include a volatile geopolitical environment or business disruptions akin to those in FY26. However, its strong competitive position hedges that risk significantly, as already demonstrated multiple times," he brokerage said.
Systematically, said ICICI Securities, lower passenger load dactor (PLF) and higher fares have been the model for some time. Domestic market share of IndiGo has increased in July to 67.4 per cent against 66.3 per cent in June 2026 YoY. It was 64.9 per cent in May and 65 per cent in April.
ICICI Securities said International market share of IndiGo significantly decreased to 50.1 per cent in July against 54.7 per cent in June against 52.9 per cent in May.
"This has to do with restoration of international routes of Air India. Domestic ASK growth has decreased by 9.5 per cent MoM in July. International ASK growth has increased by 8.2 per cent MoM in July. Domestic PLFs have decreased for most of the airlines (259 bps for Air India, 374 bps for SpiceJet, 270bps for IndiGo, 23bps for Akasa Air in Jul’26)," it noted.