IndiGo shares gain 2% after analyst meet. Why Goldman, Morgan Stanley, others see up to 38% upside?

Shares of InterGlobe Aviation, the parent of IndiGo, rose 2% to an intraday high of Rs 4,454 on the BSE on Tuesday after several domestic and global brokerages reiterated their positive outlook on the airline. The bullish stance followed the company’s analyst meet, where management highlighted strong long-term industry growth prospects despite ongoing geopolitical uncertainties in the Middle East.

IndiGo expects strong growth tailwinds for the aviation industry over the next decade, with air passenger traffic projected to more than double between FY26 and FY35. The airline believes growth will be driven by a rising number of first-time international travellers, increasing inbound tourism into India and the development of airport infrastructure, with around 50 new airports expected to be added over the next five years.

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To capitalise on this opportunity, the company has outlined an ambitious FY30 vision. IndiGo aims to increase its available seat kilometres (ASK) to 300 billion by FY30, up from 172.4 billion in FY26, implying a 15% CAGR. It also plans to raise passenger traffic to 200 million from 123 million over the same period, reflecting a CAGR of 13%.

What are analysts saying?

Goldman Sachs maintained its Buy rating on InterGlobe Aviation with a target price of Rs 5,300 (21% upside). The brokerage expects FY27 capacity growth to remain in single digits amid fuel price volatility but believes yields will stay resilient despite cost and inflation pressures. It highlighted the airline’s focus on international expansion, targeting a 40% international capacity mix by FY30, supported by an order book of around 900 aircraft. Goldman Sachs also expects yield growth to outpace inflation over the medium term, while cautioning that near-term uncertainty around oil prices and demand could lead to volatility in both earnings and the stock.

Morgan Stanley reiterated its Overweight rating on InterGlobe Aviation with a target price of Rs 5,844 (34% upside), describing IndiGo as one of the world’s best-run airlines with highly competitive non-fuel costs. The brokerage expects FY27 revenue growth to be driven primarily by fares, while capacity growth is likely to remain in single digits. It also highlighted the company’s disciplined premiumisation strategy, which bridges the gap between low-cost and full-service carriers. International operations are expected to account for 40% of the network by FY30, up from 32% in FY26. For Q1 FY27, Morgan Stanley expects passenger revenue growth per seat in the mid-teens on a year-on-year basis.

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Motilal Oswal maintained a Buy rating on InterGlobe Aviation with a target price of Rs 5,600, an upside of 28% from current market levels. “Despite persistent near-term headwinds owing to airspace disruptions in the Middle East, high fuel costs and INR depreciation, we remain confident about INDIGO’s growth strategy, anchored by India’s strong domestic demand base and the company’s steadily expanding international network,” the brokerage said. Elara Capital retained its Buy rating on InterGlobe Aviation and assigned a target price of Rs 6,020 (38% upside). The brokerage expects FY27 growth to be led by stronger airfares, while volumes are likely to improve as aircraft deliveries normalise.

(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of The Economic Times)