Why Is Market Veteran Ajay Bagga Cautious Of Aviation Sectors?

Even as several brokerages continue to maintain a ‘Buy’ rating on IndiGo, target prices are being cut amid fresh operational and sector-wide concerns. IndiGo has long been seen as a core wealth-creating stock in Indian aviation, backed by strong profitability over the years. However, market expert Mr. Bagga has flagged the aviation sector as a high-risk and avoid category, citing high interest rates, heavy capital requirements, strict regulation and extreme dependence on aviation fuel prices. He also pointed to rising airport charges and limited pricing power as long-term challenges for airlines. The recent disruption at IndiGo has raised questions around infrastructure resilience and competition, with calls growing louder for greater capacity and the breaking of the aviation duopoly. For investors, the big debate now is whether to stay focused on the long term or reassess risks in the sector.