IndiGo Shares Hit Record As Strong Earnings Drive Target Price Hikes
InterGlobe Aviation's stock rose as much as 2.92% during the day to Rs 4,529 apiece on the NSE.
Shares of InterGlobe Aviation Ltd. surged to a record high on Friday after brokerages raised their target price for the stock on strong March quarter results. The airline reported an over twofold rise in net profit during the fourth quarter of financial year 2024.
IndiGo is set to change over the next few years, with loyalty programmes, business class and long-haul international planned, Morgan Stanley said in a report. "The change may involve near-term cost pressures, but we believe that it is the right strategy, as the consumer is also evolving."
The brokerage raised its earnings-per-share estimates by 2–5% over fiscal 2025–26 as they build in stronger capacity growth, a rising share of high-margin international business and higher other income due to a rising cash balance.
The operator of India's largest airline reported a 106% surge in the bottom line to Rs 1,895 crore during the January–March period. This compares to the Rs 1,916-crore estimate by analysts tracked by Bloomberg.
Nuvama attributed the airline's growth to strong capacity addition, low aviation-turbine-fuel cost and partial rise in yields. But the airline's growth was partially offset by aircraft on the ground.
IndiGo airline that more flights were grounded during the March quarter due to additional inspections. "We received information about additional inspections, which will result in more flights being grounded," Chief Executive Officer Pieter Elbers told NDTV Profit.
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IndiGo's stock rose as much as 2.92% during the day to Rs 4,529 apiece on the NSE. It was trading 1.44% lower at Rs 4,337 per share, compared to a 0.18% decline in the benchmark Nifty as of 10:10 a.m.
It has risen 91% in the last 12 months and 46% on a year-to-date basis. The total traded volume so far in the day stood at 7.7 times its 30-day average. The relative strength index was at 68.
Sixteen out of the 22 analysts tracking the company have a 'buy' rating on the stock, four recommend a 'hold' and two suggest 'sell', according to Bloomberg data. The average of 12-month analyst price targets implies a potential upside of 1.3%.
