InterGlobe Aviation, the parent company of leading low-cost carrier IndiGo, witnessed an impressive ascent on March 26, with its stock rallying over 4.3% to hit a historic peak of Rs 3,429.90 in morning trading. This surge was fueled by a wave of bullish growth forecasts from various brokerages, issued in the wake of an analysts’ meeting.
As the clock struck 11:57 am, InterGlobe Aviation was holding steady at Rs 3,423 on the National Stock Exchange, maintaining its upward trajectory.
Following the illuminating analyst session on March 22, prominent brokerages such as UBS Securities, Kotak Institutional Equities, and Motilal Oswal Financial Services all chimed in with optimistic outlooks for IndiGo. They highlighted the airline’s ambitious expansion plans and the favorable growth projections for India’s aviation sector as key factors driving their positive sentiment.
Projections for the domestic air travel industry paint a promising picture, with a robust compounded annual growth rate of 15% anticipated over the period spanning FY24 to FY30, according to these brokerages’ assessments.
In light of these encouraging prospects, brokerages have set their sights on IndiGo’s stock, assigning price targets ranging from Rs 3,500 to Rs 4,300. These targets imply potential upsides of 7% to 31% from the previous close, underlining the confidence in IndiGo’s ability to capitalize on emerging opportunities and sustain its upward trajectory in the market.
In a recent development, UBS Securities has revised its target price for IndiGo, elevating it by 2.5 percent to Rs 4,000. This valuation is based on the expectation of 11 times the company’s estimated EV/EBITDA for FY26.
Despite acknowledging potential hurdles such as escalating crude prices and pilot salaries, UBS maintains a bullish stance on IndiGo’s future. The firm’s optimism is grounded in the anticipated improvements in both Available Seat Kilometer (ASK) growth and yields. However, UBS has also highlighted certain short-term risks, particularly regarding potential upside variations in its yield estimates for IndiGo. Moreover, uncertainties persist regarding capacity demand growth and profitability in the medium term.
Nevertheless, UBS Securities’ upward revision of IndiGo’s target price reflects its confidence in the airline’s ability to navigate through challenges and capitalize on growth opportunities in the aviation sector.
UBS reiterated its positive outlook on IndiGo, emphasizing the promising growth prospects of the Indian aviation industry, coupled with the airline’s advancements in international travel market share, efficient cost structure, and operational prowess. Maintaining its “buy” recommendation on the stock, UBS underscored its confidence in IndiGo’s ability to thrive in the evolving landscape.
Similarly, Kotak highlighted IndiGo’s strategic shift towards enhancing connectivity to capture a larger share of international journeys, along with investments in bolstering systems and operations. The brokerage expressed optimism regarding the near-term outlook for both Available Seat Kilometer (ASK) growth and pricing, attributing it to IndiGo’s strategic planning and the underlying strength of demand in the market.
In line with their bullish outlook, Kotak raised its target price for IndiGo to Rs 4,300 while reiterating its “buy” recommendation, signaling continued confidence in the stock’s potential for growth and value creation.
Sources: moneycontrol.com
Disclaimer: The information provided by Bystox regarding stock market activity is intended for informational purposes only and should not be interpreted as investment advice. Readers are strongly advised to seek guidance from a qualified financial advisor prior to making any investment decisions.
Comments are closed.