The airline sector has been in focus on the back of several factors including the aftermath of the devastating Air India crash and rising ATF prices due to unrest across West Asia. One of the key listed entities, IndiGo has seen a strong upmove in the last 5 days, up 6%. Jefferies has a Buy on IndiGo with a target of Rs 6,300 per share.
While Air India navigates post-crash regulatory hurdles and already ongoing complex merger integration, Jefferies believes that IndiGo is well-positioned to consolidate leadership especially in the high-frequency domestic and the emerging regional international routes.
Jefferies on IndiGo: Strong on-time performance
Jefferies highlighted that though IndiGo also reported some technical snags/glitches, the airlines’ stronger on-time performance, operational efficiency, and low-cost service continues to be a winner compared to its peers. They expect “near-term market share gains, especially in premium short-haul and metro-heavy corporate travel, could accrue to IndiGo.”
Jefferies on IndiGo: Key risks ahead
That said, Jefferies pointed out the key risks for the aviation sector. These include –
- Hike in ATFprice
- Rupee depreciation
- Regulatory pressure & insurance cost may increase across the sector
- Normalisation of supply chain for Boeing (supplier for key competitor)
- Decrease in Railway Passenger Fares
However, Jefferies cautioned that any delay in IndiGo’s own international expansion or execution missteps could limit gains.
IndiGo Q4 earnings performance
A quick look at IndiGo’s financial performance. The key domestic flier has clocked 62% YoY jump in its consolidated net profit for Q4FY25. The Q4 revenue from operations jumped 24% YoY. The company increased capacity by 21% and the load factor increased to 87% in Q4.It had also announced a final dividend of Rs 10 per share for FY25.
IndiGo share price
For 2025, the share price of IndiGo has gained 23%. The returns over the last 1 year is at 33%. The stock is trading close to its 52-week high of Rs 5,729 per share. It had hit the 52-week high recently on June 10. The 52-week low for the stock is at Rs 3,780 per share. It hit these levels in October, 2024.