indigo shares: InterGlobe Aviation shares rally 3% after doubling Q4 profit. Brokerages increase target price up to Rs 5,192

Revenue from operations increased 26% year-on-year (YoY) to Rs 17,825 crore in the reporting quarter while the airline’s passenger ticket revenues grew 25% YoY to Rs 15,601 crore.

Here’s what analysts from various global and domestic brokerages say:

Nuvama

Nuvama stated that IndiGo’s growth is attributable to strong capacity addition, low ATF cost, and a rise in yields. RPKM rose as the demand stayed strong while the international segment surged 49% YoY. Nuvama further believes cost realization to continue and yields to remain healthy as a duopolistic structure bodes well for the company.Nuvama maintained a ‘buy’ view of the stock with a target price of Rs 5,192.Bank of AmericaThe global brokerage firm has lifted its estimates after Q4 beat. They expect a temporary margin squeeze in Q1FY25 but the earnings growth story is intact beyond the near term.

BofA has retained a ‘buy’ on IndiGo with a target price of Rs 4,900.

Emkay Global

“Indigo is unveiling a tailor-made business-class offering by Aug-24; internationalization remains a key strategy. We raise FY25/26E EPS by 2%/7% to build in lower fuel cost,” said Emkay Global.

The domestic brokerage firm has retained a ‘buy’ rating on IndiGo with a target price of Rs 5,000.

Kotak Institutional Equities

Indigo continued to benefit from constrained capacity in the sector, with growing yields more than compensating for growing costs. While noting the case of spreads potentially declining YoY in FY2025 over a high base, Indigo’s undeterred focus is to create building blocks for changing the travel needs of a fast-growing India. The key to making such big strides in product offerings is a steady supply of aircraft until 2035, something that challengers lack and will increase lead for Indigo.

KIE has a ‘buy’ view on the stock with a revised target price of Rs 5,100 from an earlier Rs 4,700.

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Investec

Investec believes that while Q4 results were impressive, an earnings deceleration is lined ahead. The brokerage firm does not anticipate a repeat of a similar performance in FY25 given the substantial increase in CASK. Further, a drop in FY26 earnings has been estimated due to tax implications.

Investec has maintained a ‘hold’ view on the stock with a target of Rs 4,050.

Motilal Oswal

IndiGo is working to increase its international presence through strategic partnerships and loyalty programs. The management has also been taking several pre-emptive measures to increase its global brand awareness, as it expects to capture a bigger share of growth from its international market in the coming years.

Motilal reiterated its ‘neutral’ rating with a target price of Rs 4,210.

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