Emkay Global maintained its ‘Buy’ rating on InterGlobe Aviation, the parent firm of IndiGo, with a revised target price of Rs 5,500, cutting 13% from Rs 6,300. Nonetheless, the brokerage house sees 31.5% upside in the stock as the government takes the hit of rising oil prices.
Government moderation of fuel prices
While the West Asia conflict caused a massive initial spike in oil prices, the Government of India (GoI) intervened to restrict the domestic Aviation Turbine Fuel (ATF) price hike for scheduled airlines to approximately 25%. This action helped shield the industry from the full impact of global price volatility and currency weakening.
Strategic international fuel surcharges
IndiGo has materially increased its fuel surcharges on international routes to pass on rising costs. For example, the surcharge for the UK and Europe (excluding Greece and Turkey) was raised from a range of Rs 425–2,300 to Rs 10,000.
Appointment of a high-profile CEO
Analysts at the brokerage firm see the appointment of Willie Walsh (current Director General of IATA and former CEO of British Airways) as the new CEO as a major positive. His extensive global experience is expected to significantly benefit IndiGo’s focus on international expansion and the development of new business models.
Resilience and market dominance
Emkay Global emphasised IndiGo’s dominant position in the Indian aviation market and its proven track record of emerging stronger from previous crises, such as the COVID-19 pandemic and the Russia-Ukraine war. Just to give context, the firm commands nearly two-thirds of the country’s aviation market.
Improving profitability spreads
Despite higher fuel costs and potential slowdowns in passenger volumes, the brokerage firm estimated that IndiGo’s PBT (Profit Before Tax) spreads will improve compared to pre-conflict levels. This is supported by an estimated 20% rise in base fares/RASK, which helps offset the 50% rise in blended fuel costs.
InterGlobe Aviation Q3FY26
InterGlobe Aviation reported a consolidated net profit of Rs 549.8 crore in the third quarter of the current financial year, a tumbling 77.5% year-over-year from Rs 2,448.8 crore in the same period of the previous financial year.
The company stated that the net profit was impacted by new labour codes and the significant operational disruption faced in December 2025.
Excluding the total exceptional items worth Rs 1,546.5 crore, the aviation company’s net profit would have come in at Rs 2,096.3 crore, declining 14% YoY.
However, the airline’s revenue from operations increased 6% YoY to Rs 23,471.9 crore in Q3FY26.
InterGlobe Aviation share price performance
The share price of IndiGo has changed a little in the last five trading sessions. The stock has declined 7.6% in the past one month and 27% in the last six months. IndiGo’s stock price erased over 16% of investors’ wealth in the previous one year.
Disclaimer: This article provides factual analysis only and is not, and should not be construed as, an offer, solicitation, or recommendation to buy or sell securities. Investors must conduct their own independent due diligence and seek advice from a SEBI-registered financial advisor.