IndiGo shares rebound nearly 8% from 52-week low; what lies ahead for India's largest airline?

Shares of InterGlobe Aviation Ltd, the parent company of IndiGo, have rebounded nearly 8 per cent from their recent 52-week low, even as the stock continues to face pressure from multiple headwinds.

On Wednesday, the stock settled 0.70 per cent lower at Rs 4,351.60. At this closing level, it has recovered 7.83 per cent from its one-year low of Rs 4,035.65, touched earlier this week on Monday (March 9).

IndiGo, which commands the largest share of India's domestic aviation market, was trading higher earlier in the day but pared gains during afternoon deals after Brent crude prices moved above the $90 mark amid fresh escalation in geopolitical tensions in West Asia.

"IndiGo is a stock that has frequently been exposed to and adversely impacted by news flows. Be it the December crisis that many of us experienced due to flight delays and cancellations, rising crude oil prices, Gulf tensions, among others, and now the resignation of the airline's CEO. The stock has not been able to perform for quite some time. So these are all the negatives that are governing the price action as of now. However, there are positives as well. IndiGo commands a major chunk of India's airline business, and we cannot ignore that," Gaurav Sharma of Globe Capital told Business Today.

"Therefore, the stock may underperform for a quarter or two going forward. But beyond that, in the second half of the upcoming financial year, I expect a recovery. So any dip from current levels should be considered a buying opportunity," he added.

Meanwhile, IndiGo CEO Pieter Elbers has resigned with immediate effect, citing personal reasons. Following his exit, Co-Founder and Managing Director Rahul Bhatia has taken over on an interim basis.

From a technical perspective, a few analysts outlined support for IndiGo's counter in the Rs 4,000–4,300 range.

"The Rs 4,100-4,000 zone is likely to support any shortcomings, while Rs 4,660-4,800 is likely to act as an intermediate hurdle for IndiGo. Any breakthrough on either side is likely to trigger momentum in the counter," said Osho Krishan, Senior Analyst – Technical & Derivative Research at Angel One.

According to AR Ramachandran, part-time Sebi-registered research analyst at Tips2trades, "The stock is bearish on daily charts with strong resistance at Rs 4,474 and a daily close below the support of Rs 4,300 could lead to a downward target of Rs 3,950 in the near term."