IndiGo shares rise 2% as Jefferies retains Buy call, sees 20% upside

InterGlobe Aviation, which operates airline IndiGo, remains on Jefferies' radar as the global investment bank retained its 'Buy' rating on the airline with a Rs 5,840 price target, implying around 20% upside .Jefferies' view follows management commentary at the Jefferies India Forum 2026, where the airline outlined its capacity, pricing and cost outlook.

IndiGo has retained its FY27 capacity growth guidance in the single digits, while capacity in the second quarter is expected to remain broadly flat year-on-year before improving in the second half. Management has also maintained its guidance of around 25% PRASK, or passenger revenue per available seat kilometre. Jefferies noted that the recent increase in fares could prove sticky even after operating conditions normalise, potentially supporting revenue realisation.

IndiGo shares rose 1.92% on Thursday, hitting a high of Rs 4,947.30, compared with their previous close of Rs 4,854. The stock opened at Rs 4,912.20 and touched an intraday low of Rs 4,883.80.

The airline is also focusing on cost rationalisation amid elevated operating costs. It has discontinued its damp-leased wide-body programme, while increasing utilisation of newer-generation aircraft. IndiGo has also deferred salary hikes for senior employees. Management said the appointment of Willie Walsh as CEO in August has not changed its broader strategy, with operational resilience, cost efficiency and the development of its A350 programme remaining key priorities.

On the financial front, Jefferies estimates IndiGo's revenue to rise to Rs 1,01,931 crore in FY27, from Rs 84,962 crore in FY26. EBITDA is estimated to increase to Rs 17,710 crore from Rs 12,720 crore, while the brokerage expects the company to report a Rs 1,978-crore profit in FY27, compared with a Rs 786-crore loss in FY26.

Jefferies also highlighted IndiGo's strong balance sheet, including around Rs 39,000 crore in free cash, giving it flexibility for aircraft ownership and infrastructure investments, including in-house MRO capabilities and an integrated campus. However, the global investment bank identified risks including crude and aviation turbine fuel prices, rupee depreciation and aircraft supply-chain normalisation.