IndiGo’s share price experienced a notable increase of over 3% on November 6, 2023, reaching Rs. 5,739.50, despite the airline announcing a significant quarterly loss. The uptick comes as the airline raised its capacity growth guidance for the financial year 2026, indicating confidence in a robust recovery for air travel demand. With brokerage firms like Motilal Oswal and PL Capital maintaining “Buy” ratings, target prices for the stock range between Rs. 6,300 and Rs. 7,300, reflecting broader optimism in the market.
In early trade, shares of IndiGo’s parent company, InterGlobe Aviation, rose significantly, showcasing investor optimism. The stock opened at Rs. 5,750, fluctuated intraday to a high of Rs. 5,833.50, and dipped to a low of Rs. 5,682. The trading volume reached 1.78 million shares, vastly surpassing the 20-day average of 600,000, illustrating heightened market activity.
The airline reported a steep net loss of Rs. 2,582 crore for the July-September quarter of FY26, compared to a loss of Rs. 987 crore in the same period last year. This widening loss was primarily attributed to foreign exchange fluctuations and soaring operating costs. Despite this, excluding forex-related losses, IndiGo posted a net profit of Rs. 104 crore, an improvement from a loss of Rs. 754 crore a year earlier, suggesting a resilient underlying business model.
Market Response and Analyst Outlook
Revenue from operations rose by 9.3% year-on-year to Rs. 18,555 crore, driven by strong passenger demand and increased yields. However, total expenses surged by 18.3% to Rs. 22,081 crore, with foreign exchange losses escalating twelvefold to Rs. 2,892 crore. Despite these challenges, analysts remain optimistic about IndiGo’s long-term prospects, viewing the airline as a key player in India’s expanding aviation market.
Brokerages such as Motilal Oswal Financial Services continue to support IndiGo’s growth trajectory, maintaining a “Buy” rating with a target price of Rs. 7,300 per share, indicating a potential upside of nearly 30%. The brokerage emphasized that while immediate earnings might be affected by forex volatility and rising operational costs, the airline’s decision to expand capacity, particularly on international routes, will bolster future growth and mitigate currency exposure risks.
Similarly, PL Capital has a “Buy” rating, with a target price of Rs. 6,332, representing a 12% upside from current levels. The firm projects a 12% compound annual growth rate (CAGR) in sales and an 11% CAGR in EBITDAR from 2025 to 2027, fueled by stable pricing and capacity growth in the early teens.
Future Prospects and Investment Considerations
Despite current profitability pressures, analysts urge investors to consider the long-term potential of IndiGo’s stock. The airline has adjusted its capacity growth guidance for FY26 from the low double digits to the mid-teens, reflecting confidence in increasing passenger demand and sustainable growth.
Investors are generally advised to hold or accumulate IndiGo shares on dips, focusing on the anticipated upside as cost pressures ease and capacity expansion begins to generate returns. The airline’s strong market position, efficient cost structure, and expanding international footprint position it favorably within India’s competitive aviation landscape.
In summary, while IndiGo faces short-term challenges, including high fuel prices and foreign exchange volatility, its strategic initiatives and market conditions suggest a promising outlook for investors willing to adopt a medium- to long-term perspective.
