IndiGo shares in bear grip: Emkay cuts target by 13%, says stock still a Buy
IndiGo shares were trading at Rs 4,046.80 on BSE, down 3.21 per cent. Emkay's target still suggests 36 per cent potential upside ahead.
- Apr 2, 2026,
- Updated Apr 2, 2026 1:19 PM IST
InterGlobe Aviation Ltd (IndiGo) has remained under pressure, with the stock declining 35 per cent from its August 2025 high of Rs 6,225.05. The low cost carrier has been in focus amid disruptions in the global aviation sector following the West Asia conflict, with rising oil prices adding to investor concerns. The recent ATF price revision has further weighed on sentiment. Emkay Global Financial Services cut its target price on IndiGo by 13 per cent, but maintained a ‘Buy’ rating on the stock.
Oil marketing companies such as Indian Oil Corporation Ltd (IOC) initially raised domestic and international ATF prices sharply by 115 per cent and 107 per cent month-on-month to Rs 207 and $1.7 per litre, respectively. However, in a subsequent move, domestic airlines saw a more moderate effective increase of about 25 per cent to around Rs 105 per litre, as the government intervened to shield passengers from a steep rise in airfares, while international fares remained unchanged.
Emkay said OMCs seem to have taken the hit for now, as the oil price spike to over $100 a barrel and currency weakening alone requiring a 35 per cent increase, assuming no change in refining cracks.
IndiGo, Emkay said, has revised its fuel surcharge rates from April 2, with domestic fares ranging from Rs 275 to Rs 950 for distances covering 0-500 km to less than 2,000 km, with the average likely to be similar to the March 14th rate of Rs 400.
It noted that international fuel surcharge is hiked materially, from Rs 425-2,300 for the South Asia–Europe route to Rs 900-10,000.
"Based on IndiGo’s average stage length, we estimate 20 per cent rise in the base fare/RASK vs 50 per cent rise in blended fuel cost, with PBT spreads improving from pre-conflict levels; this can offset the slowdown in pax volumes and RPK (13-14 per cent of ASK deployed in the conflict-hit Gulf)," Emkay said. Emkay Global said the earnings visibility is low amid the current macro volatility as it cut FY26-28 EPS by 7-28 per cent and target by 13 per cent to Rs 5,500 from Rs 6,300, valuing the airline at 20 times March 2028 earnings per share.
On Thursday, the stock was trading at Rs 4,046.80 on BSE, down 3.21 per cent. Emkay's target still suggests 36 per cent potential upside ahead.
"Given IndiGo’s dominant position in India’s aviation market and the past precedence of emerging stronger from a crisis situation (Covid, Russia-Ukraine war) and with leadership largely in place; maintain BUY on the stock," it said.
InterGlobe Aviation Ltd (IndiGo) has remained under pressure, with the stock declining 35 per cent from its August 2025 high of Rs 6,225.05. The low cost carrier has been in focus amid disruptions in the global aviation sector following the West Asia conflict, with rising oil prices adding to investor concerns. The recent ATF price revision has further weighed on sentiment. Emkay Global Financial Services cut its target price on IndiGo by 13 per cent, but maintained a ‘Buy’ rating on the stock.
Oil marketing companies such as Indian Oil Corporation Ltd (IOC) initially raised domestic and international ATF prices sharply by 115 per cent and 107 per cent month-on-month to Rs 207 and $1.7 per litre, respectively. However, in a subsequent move, domestic airlines saw a more moderate effective increase of about 25 per cent to around Rs 105 per litre, as the government intervened to shield passengers from a steep rise in airfares, while international fares remained unchanged.
Emkay said OMCs seem to have taken the hit for now, as the oil price spike to over $100 a barrel and currency weakening alone requiring a 35 per cent increase, assuming no change in refining cracks.
IndiGo, Emkay said, has revised its fuel surcharge rates from April 2, with domestic fares ranging from Rs 275 to Rs 950 for distances covering 0-500 km to less than 2,000 km, with the average likely to be similar to the March 14th rate of Rs 400.
It noted that international fuel surcharge is hiked materially, from Rs 425-2,300 for the South Asia–Europe route to Rs 900-10,000.
"Based on IndiGo’s average stage length, we estimate 20 per cent rise in the base fare/RASK vs 50 per cent rise in blended fuel cost, with PBT spreads improving from pre-conflict levels; this can offset the slowdown in pax volumes and RPK (13-14 per cent of ASK deployed in the conflict-hit Gulf)," Emkay said. Emkay Global said the earnings visibility is low amid the current macro volatility as it cut FY26-28 EPS by 7-28 per cent and target by 13 per cent to Rs 5,500 from Rs 6,300, valuing the airline at 20 times March 2028 earnings per share.
On Thursday, the stock was trading at Rs 4,046.80 on BSE, down 3.21 per cent. Emkay's target still suggests 36 per cent potential upside ahead.
"Given IndiGo’s dominant position in India’s aviation market and the past precedence of emerging stronger from a crisis situation (Covid, Russia-Ukraine war) and with leadership largely in place; maintain BUY on the stock," it said.