InterGlobe Aviation - International Expansion To Provide Runway For Growth: Motilal Oswal

Motilal Oswal Report

Interglobe Aviation Ltd. plans to increase its fleet size to 350 in FY24 from 306 in FY23 (334 as of September 2023) to cater to the increased demand in the domestic market, and also plans to add 10-15 new destinations.

The management also expects passenger traffic to increase to 100 million in FY24 from 85 million in FY23.

IndiGo has been taking several measures to increase its global brand awareness, as it expects to increase the growth share from its international operations. However, competition in the sector is expected to intensify with the resurgence of Air India and the entry of Akasa Air.

While we remain positive on the Indian aviation industry, IndiGo will have to navigate through various challenges, such as highlighted above, in the near to medium term.

Reiterate Neutral with a target price of Rs 2,800 (premised on 7.5 times FY25E enterprise value/Ebitdar).

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