Should you buy or sell IndiGo shares after Q3 profit hit by one-offs? Brokerages bullish; check target prices

InterGlobe Aviation (IndiGo)

• Brokerages stay positive on IndiGo despite significant Q3 profit drop from one-offs.
• Underlying profitability is healthy; international expansion to drive Q4 growth
• UBS, Citi, and Goldman Sachs retain 'Buy' ratings with higher target prices

Did our AI summary help?

Brokerages have largely maintained a bullish stance on IndiGo parent InterGlobe Aviation despite a sharp headline drop in Q3 FY26 net profit, arguing that the earnings impact was driven by one-time disruptions and regulatory changes rather than any deterioration in the airline’s underlying business.

InterGlobe Aviation reported a consolidated net profit of Rs 549.8 crore for the fiscal third quarter, down 77.5 percent year-on-year, weighed down by exceptional charges linked to the implementation of new labour codes and operational disruption during early December. Excluding exceptional items and forex impact, underlying profitability remained healthy, brokerages said in their post-results assessments.

Ahead of the quarterly results, InterGlobe Aviation shares rose 1.47 percent to end at Rs 4,929 on NSE on Thursday. The stock is up about 19 percent over the past year, outperforming the benchmark Nifty 50.

InterGlobe Aviation stock call: Brokerages positive on growth narrative

UBS reiterated its ‘Buy’ rating on IndiGo stock with a target price of Rs 6,170 per share, implying an upside of over 25 percent. UBS said that while the near-term outlook remains soft, medium- to long-term fundamentals are intact. The brokerage said the October-December quarter performance was “decent despite disruptions”, adding that management’s guidance of around 10 percent capacity growth in Q4 FY26 -- largely led by international expansion -- supports the growth narrative. It flagged higher cost guidance for the January-March quarter, but said yields are expected to moderate only gradually from a strong base.

Citi also retained a ‘Buy’ call with a target of Rs 5,700, stating that the financial impact of the FDTL-related disruption was lower than its estimates and that operational metrics were broadly in line. Citi highlighted better-than-expected yields and said IndiGo’s operations are normalising, with market share remaining strong and international route expansion continuing.

Goldman Sachs maintained its ‘Buy’ rating with a target price of Rs 6,000, noting that reported profit before tax came in above expectations despite exceptional costs. Goldman said costs excluding forex, particularly aircraft rentals, were lower than anticipated, while yields and ticketing RASK were largely in line with estimates. It also pointed to management’s guidance of around 10 percent year-on-year ASK growth in Q4, driven mainly by international operations.

Operationally, while brokerages acknowledged the impact of December’s disruptions and the regulatory reset, they underlined IndiGo’s strong balance sheet, scale advantage and execution track record. With cash balances remaining robust and capacity growth set to resume in the fiscal fourth quarter, analysts broadly see the Q3 setback as transitory rather than structural.

Disclaimer: The views and investment tips expressed by investment experts on Moneycontrol.com are their own and not those of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.