InterGlobe Aviation: Upside capped for IndiGo shares? What MOFSL says

The outlook for InterGlobe Aviation Ltd (IndiGo) remains robust, driven by its market leadership and global expansion plans. The airline looks set to benefit from India’s booming aviation sector, MOFSL said in its latest note adding that IndiGo's management has also taken preemptive measures to increase its global brand awareness in a bid to capture a bigger share of international market in the coming years.

That said, MOFSL's target price suggests upside is capped for the airline stock, following a 105 per cent rally in the past one year. On Wednesday, the stock was trading 0.31 per cent lower at Rs 4,916.30. MOFSL suggested a target price of Rs 4,970 on IndiGo, which hints at a mere 1 per cent potential upside ahead. Fuel price volatility and global economic risks remain key challenges for InterGlobe Aviation, it said.

"The stock is trading at 24 times FY26E EPS of Rs 204 and FY26E EV/Ebitdar of 10 times. We reiterate our Neutral rating on the stock with a target price of Rs 4,970, based on 10 times FY26E EV/Ebitdar," the domestic brokerage said.

MOFSL said IndiGo’s fleet expansion is marked by a substantial order of nearly 985 aircraft, including fuel-efficient Airbus A320neo and A321XLR models, which are crucial for maintaining cost advantages and enhancing operational efficiency.

By CY30, the airline plans to operate over 600 aircraft to meet the rising demand and leverage growth in both domestic and international air traffic, it said.

InterGlobe Aviation has expanded its domestic network to 88 destinations and added new international routes, including 7 new destinations. It is bolstering its international presence through strategic partnerships and loyalty programs. In FY24, IndiGo served 10.67 crore customers and added 63 aircraft, MOFSL said.