IndiGo shares fall 3% after govt orders airline to cut 10% of flights: Here's what brokerages say

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The shares of InterGlobe Aviation, the parent company of IndiGo, dropped more than 3 percent on December 10, falling for eight out of nine consecutive sessions. This comes after Indian government ordered the airline to cut 10 percent of its planner flights after its mass cancellations.

The shares of the company closed at Rs 4,810 apiece on Wednesday.

Here's what Aviation minister said:

Union Civil Aviation Minister Ram Mohan Naidu took to X on Tuesday to announce the cut, which was raised from the earlier 5 percent. He shared pictures of his meeting with IndiGo CEO Pieter Elbers.

"The Ministry considers it necessary to curtail the overall Indigo routes, which will help in stabilizing the airline’s operations and lead to reduced cancellations. A curtailment of 10% has been ordered. While abiding with it, Indigo will continue to cover all its destinations as before," Naidu wrote in his post on X.

He noted that Elbers was summoned to the Ministry to provide an update regarding the mass cancellations that led to significant amount of chaos across India’s major airports. The CEO of the airline has confirmed that 100 percent of the refunds for flights affected till December 6 have been completed.

"Indigo has been instructed to comply with all the directives of the Ministry, including fare capping and passenger convenience measures without any exception," Naidu added.

During the last week, many passengers faced severe inconvenience due to Indigo’s internal mismanagement of crew rosters, flight schedules and inadequate communication. While the enquiry and necessary actions are underway, another meeting with Indigo’s top management was held to… pic.twitter.com/yw9jt3dtLR

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— Ram Mohan Naidu Kinjarapu (@RamMNK) December 9, 2025

IndiGo’s flight cancellations lead to widespread chaos at India's major airports for several days. CEO Peter Elbers earlier yesterday asserted that IndiGo is “back on its feet” and operations are now stable.

A significant factor behind the chaos is a sharp shortage of crew, particularly pilots, following the introduction of revised Flight Duty Time Limitation (FDTL) norms last month. The new rules mandate more rest hours and humane rosters, but IndiGo has been struggling to realign its network accordingly.

HSBC on IndiGo:

HSBC kept a ‘Buy’ call on the stock, saying that the structural growth story of the company remains intact. However, it reduced its target price for the stock to Rs 5,977 per share, implying an upside potential of more than 20 percent from the stock’s previous closing price.

HSBC said that the company faces strong headwinds from mass cancellations, FDTL norms and reputational damage. It added that the airline’s cost advantage and peer capacity growth however suggest no structural damage.

HSBC sees IndiGo’s staff costs rising by nearly Rs 45 crore to approximately Rs 90 crore due to the new FDTL norms. Temporary reputational damage is expected in the international markets, but the impact will likely be short-lived, it added.

Morgan Stanley on IndiGo:

Morgan Stanley remained ‘Overweight’ on the stock, with a target price of Rs 6,540 per share. This implies an upside potential of nearly 32 percent from the stock’s previous closing price.

The international brokerage noted that the airline’s operations have stabilized with on-time performance returning to normal levels. Daily departure improved significantly towards expected levels. However, it noted that additional hotel and ground transport booking may pressure near-term margin.

Growth in the second half of FY26 is expected to be muted, but one-year risk/reward looks attractive, Morgan Stanley said, adding that increased regulatory oversight remains a key risk to monitor.

UBS on IndiGo:

UBS kept its 'Buy' call on the shares of IndiGo, but reduced its target price for the stock to Rs 6,350 per share. The international brokerage said that inadequate preparations for the revised FDTL norms have led to major disruptions.

It raised cost estimates for FY26-FY28 to account for the additional crew required to comply with the FDTL norms and higher operational costs driven by rupee depreciation against the dollar.

IndiGo's long-term growth outlook however remains robust, supported by its international expansion, UBS said. It added that the key downside risks include any contingent costs arising from operational disruptions and further depreciation.

Jefferies on IndiGo:

Jefferies kept a 'Buy' call on the stock, with a target price of Rs 7,025 per share. The international brokerage noted that the company has been hit the hardest by the new FDTL norms, which reduce pilot duty hours and increases crew requirements. It noted that the rule change coincided with IndiGo’s capacity expansion, technical issues and congestion, triggering cascading disruptions.

Airline is now recalibrating schedules and expects normalcy by mid-December, Jefferies noted, adding that IndiGo will face rising costs from disruptions and higher crew expenses.

JM Financial on IndiGo:

JM Financial kept a 'Reduce' call on the stock, with a target price of Rs 5,570 apiece. The domestic brokerage said that recent mismanagement leading to significant flight cancellations is largely a function of new FDTL norms impact kicking in immediately post Airbus software upgrade challenges. "The recent incident is likely to lead to a higher CAGR in CASK ex-fuel-ex-forex in future years subject to regulatory actions," it said.

“Near-term, we estimate earnings hit of 8-9% for FY26 if the situation lasts for a total of ~15 days. We await further clarity to revise our earnings estimates, given it’s a developing situation. Even as the FY26 earnings hit has been priced in, the stock is yet to price in 1) structural cost increase driven by regulatory actions 2) one time penalty 3) management change if any,” it added.

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