IndiGo shares at Rs 2,300 or Rs 3,000? Here are target prices post Q1 results

InterGlobe Aviation were robust across key metrics in the June quarter, with record top and bottom line prints. Share price targets on IndiGo by a couple of brokerages, however, are mixed, ranging from Rs 2,300 to Rs 3,000, as some analysts stayed wary of Rakesh Gangwal’s impending stake sale and rising competitive intensity in the sector after SpiceJet receiving funds through promoter infusion and Jet airways receiving Indian air operators (by DGCA) permit taking it a step closer towards its revival.

There is also likely resumption of Go First as DGCA conditionally allowing the grounded airline to resume its operations, JM Financial said as it suggested a target price of Rs 2,270 on the stock.

IndiGo said its quarterly profit after tax hit a record high of Rs 3,090.60 crore in the June quarter compared with a loss of Rs 1,064.30 crore in the corresponding quarter last year. Total income for the quarter came in at Rs 17,160.90 crore which was the highest ever, the airline said in a BSE filing, adding that its results reflect strong operational performance, execution of strategy and favourable market conditions.

Motilal Oswal Securities noted that the 30-day domestic forward prices are down 15 per cent QoQ in the September quarter till date and the 15-day prices are also down 15 per cent sequentially. The same for IndiGo is down 10 per cent  for 30-day domestic forward booking and 11 per cent for 15-day domestic forward booking.

A total of 1.15 crore customers were served by the domestic aviation industry in July against an average of 1.26 crore customers. But this would mainly be attributable to seasonality, Motilal Oswal said.

"We raise our revenue estimate by 9 per cent for FY25. IndiGo has an accumulated tax loss of Rs 16,000 crore because of which we believe the company would not be paying any taxes till FY25 at least until it recovers the loss. Therefore, we increase our EPS estimate by 138 per cent/ 51 per cent for FY24/FY25. We reiterate our Neutral rating on the stock with a target of Rs 2,630," it said.

Emkay Global said IndiGo is well-placed on its own trajectory, given strong air traffic growth, steady net fleet adds and a competition faced with its own troubles.

"We raise FY24E/25E PAT by 31 per ecnt/38 per cent, factoring-in the tax-loss benefit (zero ETR) and higher other income. IndiGo’s 1,000 plane order-book positions it well in the long run, to benefit from India’s aviation boom; retain BUY, with revised target of Rs 3,000 per share," it said.

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