Global brokerage firm Jefferies has raised its target price on InterGlobe Aviation, the parent company of India’s largest low-cost carrier, IndiGo, highlighting the airline’s dominant position in the market and its strong growth potential. Jefferies now sets its target price for IndiGo shares at Rs 5,260, up from Rs 5,100 previously, reflecting a 23% upside from current levels.
IndiGo, which holds a commanding market share of over 60% in domestic air travel, is considered by Jefferies to be a “unique, strong” franchise with solid fundamentals. Despite a recent 15% dip from its 52-week high of Rs 5,035, following disappointing Q2 results and rising costs, Jefferies remains optimistic about the company’s future performance. The brokerage believes that costs are likely to normalize moving forward, paving the way for potential growth.
Jefferies further pointed out that InterGlobe Aviation’s long-term growth story remains intact, underpinned by its ability to ramp up capacity in an environment where many of its competitors face operational constraints. This capacity expansion is expected to drive favorable yields for the airline. Additionally, IndiGo’s more favorable cost structure, in comparison to its peers, provides it with a competitive advantage, especially in a market where cost pressures continue to weigh on other carriers.
The optimistic outlook reflects confidence in IndiGo’s ability to maintain its leadership in the Indian aviation sector, with solid demand for air travel and strategic expansions. As the airline adjusts to evolving market dynamics, analysts expect it to capitalize on opportunities, making the stock an attractive proposition for investors looking for growth potential in the aviation space.
