IndiGo stock set for 23% upside on strong passenger growth: MOSL

Shares of InterGlobe Aviation are set for a 23% upside on the back of strong passenger growth, according to brokerage Motilal Oswal. The airline remains well positioned to benefit from robust long-term growth trends in India's aviation sector, with domestic and international passenger traffic expected to more than double between FY26 and FY35. Growth is likely to be driven by a rising number of first-time international travellers, increasing inbound tourism, and a significant expansion in airport infrastructure, with nearly 50 new airports expected to become operational over the next five years.

To capitalise on this opportunity, the airline has laid out an ambitious FY30 growth roadmap. IndiGo aims to increase its available seat kilometers (ASK) to 300 billion by FY30 from 172.4 billion in FY26, translating into a compound annual growth rate (CAGR) of around 15 percent. The carrier also plans to raise annual passenger traffic to 200 million from 123 million during the same period, implying a CAGR of 13 percent.

The expansion strategy includes growing its fleet to 550 aircraft from 441 currently and increasing average daily departures to 3,000 from about 2,200 flights. The company is also focused on strengthening its international network through fleet additions and the deployment of long-range aircraft, according to MOSL. 

The brokerage expects earnings momentum to improve over the coming years as international operations gradually normalize and aircraft groundings linked to Pratt & Whitney engine issues decline. Fleet expansion, including the induction of A321XLR aircraft for international routes, along with sustained travel demand, is expected to support operational recovery and profitability.

Brokerage estimates suggest IndiGo could deliver revenue and EBITDAR CAGRs of 13 percent and 46 percent, respectively, between FY26 and FY28. Based on a valuation of 9 times FY28 estimated EBITDAR, the brokerage has maintained a 'Buy' rating on the stock with a target price of ?5,600.

In the previous session, IndiGo shares closed 4% higher at Rs 4537.60. Market cap of the airline stood at Rs 1.75 lakh crore.