Shares of IndiGo, owned by InterGlobe Aviation, surged to a 52-week high of ₹5,345 on Tuesday, marking an increase of up to 3.8% on the Bombay Stock Exchange (BSE). This uptick came after Motilal Oswal, a leading brokerage firm, upgraded its rating on the stock to ‘buy’ and raised its target price to ₹6,550, suggesting a potential upside of nearly 27% from the stock’s last closing price of ₹5,151.
Motilal Oswal’s decision to upgrade IndiGo’s stock is largely driven by several key factors, including strong domestic air travel demand, expected lower fuel costs due to declining crude prices, and the airline’s strategic fleet expansion plans. The brokerage firm also projected significant growth in the airline’s financials, with a compound annual growth rate (CAGR) of 28% in EBITDA and 38% in profit after tax (PAT) over the next two years, supported by new aircraft deliveries and increasing international capacity.
In addition to these factors, Motilal Oswal pointed to IndiGo’s plans to add one aircraft per week until 2030, expanding its fleet to over 600 aircraft by FY30. The airline also aims to increase its share of international capacity from 25% to 40%, with plans to introduce wide-body aircraft to enhance its long-haul and mid-long-haul routes.
However, the brokerage also noted potential risks, including delays in the delivery of wide-body aircraft, rising aircraft-on-ground (AOG) cases, and volatility in crude oil prices or currency fluctuations, which could pressure margins if not passed on to customers.
IndiGo’s stock currently trades at a price-to-earnings (P/E) ratio of 20 times FY26 earnings per share (EPS) and 9.7 times FY26 estimated EV/EBITDA, reflecting strong growth potential and a solid position in the market.
