Amid Jet Airways crisis, Credit Suisse cheers Indigo; check share price target

By: |
March 25, 2019 12:31 PM

Foreign brokerage firm Credit Suisse has upgraded its rating for Indigo-operator InterGlobe Aviation to ‘Outperform’ from an earlier rating of ‘Neutral’. It has also raised its target price to Rs 1,650 from Rs 1,075. Interglobe shares surged up to 2% on BSE in early morning trade on upgraded rating by Credit Suisse.

Credit Suisse upgrades Indigo-operator Interglobe Aviation rating to Outperform

Even as cash-strapped carrier Jet Airways continues to see troubled times, foreign brokerage firm Credit Suisse says that low-cost airline Indigo would benefit from the current turbulence in the sector, while upgrading its stock price target. Shares of Interglobe Aviation which runs the Indigo airline surged up to 2% in the early morning trade after foreign brokerage firm Credit Suisse upgraded its rating and target price on account of better yields and fleet addition. The shares gained by more than 1.7% in the morning trade to Rs 1,452.05 on BSE.

Credit Suisse has upgraded its rating for InterGlobe Aviation to ‘Outperform’ from an earlier rating of ‘Neutral’. It has also raised its target price to Rs 1,650 from Rs 1,075. The target share price implies an upside of nearly 14% from the current market prices. Credit Suisse has also revised earnings for Indigo to Rs 0 from a loss of Rs 8 per share. It has revised earnings for FY20/FYe to RS 52/86 from Rs 35/65 on better yield prospects.  InterGlobe is a leader in the aviation sector with the highest market share and it can pass on price hike going forward which would also take away the yield risk.

In the October-December quarter, the company reported revenue of Rs 7,916.22 crore,  27.98% higher than the sales of the previous quarter of Rs 6,185.31 crore and 28.14% higher from the comparable period previous fiscal. It reported a net profit of Rs 190.89 crore during Oct-Dec as against the loss of Rs 652.13 crores in the Jul-Sep quarter.

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