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IndiGo operator jumps 5% after ordering 300 planes from Airbus

Global brokerage Citi, which has maintained a neutral rating, expects the stock to rally by 20.5 percent to Rs 1,700 per share.

October 30, 2019 / 11:02 AM IST
 
 
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Shares of InterGlobe Aviation, the owner of  IndiGo, gained 5 percent intraday on October 30 after the budget airline ordered 300 aircraft from Airbus.

"This marks one of Airbus’ largest aircraft orders ever with a single airline operator. This order comprises a mix of A320neo, A321neo and A321XLR aircraft. This will take IndiGo's total number of A320neo family aircraft orders to 730," the company said in its BSE filing.

The stock has rallied 65 percent in the last one year. It was quoting at Rs 1,461.50, up Rs 51.20, or 3.63 percent on the BSE, at 1034 hours.

While maintaining a neutral rating, global brokerage Citi expects the stock to rally by 20.5 percent to Rs 1,700 per share.

"The company has a fleet of 245 planes out of which 89 are A320neos. Grounding is not a big concern if the remaining planes can be better utilised by the company. Recurrence of engine issues does not augur well from a positioning perspective," it said.

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The company should be able to manage spare engines for most affected planes. Long-term solution to the Neos is critical for smooth operations," it added.

IndiGo’s Chief Executive Officer Ronojoy Dutta said the order was a milestone, as it reiterated the company's mission of strengthening air connectivity in India, which in turn would boost economic growth and mobility.

After its first A320neo was delivered in March 2016, IndiGo’s A320neo family fleet had grown into the world's largest, with 97 A320neo aircraft operating alongside 128 A320ceos, the company said.



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Moneycontrol News
first published: Oct 30, 2019 11:02 am
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