Actions of InterGlobe Aviationthe operator of low-cost carrier IndiGo, rose 5 per cent to its daily high of Rs 4,634 on the NSE on Monday despite posting a net loss of Rs 2,536 crore for the fourth quarter of FY26, compared to a net profit of Rs 3,067 crore in the corresponding period last year. Operating revenue, however, increased marginally by 1% year-on-year (y-o-y) to Rs 22,438 crore.
The airline said its operational performance during the quarter was affected by disruptions related to the ongoing conflict in the Middle East. Capacity, measured in available seat kilometers (ASK), increased 3.4% year-on-year to 43.6 billion.
Passenger traffic amounted to 31.6 million during the quarter, a slight decrease of 1.1% compared to the previous year. EBITDAR, excluding currency impact, stood at Rs 6,435 crore, down from Rs 6,862 crore in the corresponding quarter last year. The EBITDAR margin fell to 28.7% from 31%.
IndiGo Stocks: Should You Buy, Sell or Hold?Goldman Sachs maintained its Buy rating and price target of Rs 5,200, implying an 18% upside from current levels. The Wall Street major said the airline had not provided capacity guidance for the full FY27, while high costs remained an issue. Goldman Sachs pointed out that the Indian aviation sector as a whole, with the exception of IndiGo, continues to face low profitability and fiscal stress. The brokerage retained its valuation at 10x estimated EV/EBITDAR for FY28.
Jefferies maintained its buy rating but lowered its price target to Rs 5,380 (22% upside) from Rs 5,500. The brokerage said the airline posted a weak but largely in-line performance in the fourth quarter and expects the near-term outlook to remain challenging amid elevated cost pressures. For the first quarter, IndiGo forecasts unit revenue growth of 15% on average, largely driven by higher prices, with demand so far remaining resilient enough to absorb some of the cost increases. Jefferies believes operating conditions will remain challenging in the near term, although the environment is likely to be even more challenging for its peers.
Motilal Oswal maintained his Buy rating on IndiGo with a price target of Rs 5,600, implying 27% upside potential. The brokerage said despite short-term challenges related to airspace disruptions in the Middle East, high fuel prices, rupee depreciation and higher exposure to wet leases, it remains positive about the airline’s long-term growth strategy.
It believes IndiGo is well positioned to benefit from strong domestic aviation demand in India and the continued expansion of its international network. Looking ahead, Motilal Oswal expects a gradual normalization of international operations, a reduction in Pratt & Whitney-related aircraft groundings, continued fleet additions and the deployment of A321XLR aircraft on international routes to support a profit recovery.
JM Financial maintained its Add rating with a target price of Rs 5,000, noting that capacity growth remained subdued due to the conflict in the Middle East. IndiGo reported demand growth of 3.4% year-on-year to 43.6 billion in Q4FY26 and forecast demand growth of 3-4% in Q1FY27, with most of the increase expected to come from domestic metro and leisure routes.
The brokerage expects this, coupled with PRASK’s growth of around 15 years on a favorable basis, to support a recovery in the unit economy. Capacity has been significantly affected by the conflict in West Asia, with around 18% of total capacity affected and more than 160 daily international flights disrupted in March 2026. However, the airline reported that capacity returned to around two-thirds of normal levels in May and expects full normalization by the end of June. JM Financial also highlighted that the number of grounded planes remains in the 40s, but is expected to decline to the 30s by the end of the year, which could lead to a significant increase in capacity and costs.
Elara Capital maintained its buy rating and target price of Rs 6,020, arguing that the stock’s decline of around 25 per cent over the past six months due to flight disruptions, Middle East conflict, rising crude oil prices and weak rupee has created an attractive opportunity. The brokerage believes the market is too focused on short-term challenges while overlooking the benefits of a prolonged industry-wide capacity shortage.
He pointed out that domestic advance rates increased by about 17% year-on-year, while international advance rates increased by almost 40%. Elara also noted that IndiGo reported an adjusted profit of Rs 25 billion in Q4 FY26 despite a non-cash foreign exchange loss of Rs 48 billion. Additionally, competitors’ capacity reductions have been greater than IndiGo’s, supporting the airline’s market share gains and pricing power. Although the brokerage firm has lowered its FY27 EBITDA estimate by 7% to factor in higher crude oil and rupee assumptions, its FY28 estimates remain broadly unchanged.
(Disclaimer: The recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of The Economic Times)
