IndiGo shares fall 5% after weak Q1 show; brokerages remain bullish

IndiGo shares have been on a stellar run, rising nearly 50 percent since the start of the year.

Shares of country's largest domestic airline Interglobe Aviation or IndiGo fell 5 percent to Rs 4,273 apiece in morning trade on July 29 after the company's Q1 earnings disappointed the Street.

The low-cost carrier posted an 11 percent decline in net profit at Rs 2,736 crore. Its revenue from operations rose 17.3 percent to Rs 19,570 crore from the year-ago period when the airline had reported a topline of Rs 16,683.1 crore.

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JPMorgan has maintained its 'overweight' rating, raising the target price from Rs 4,900 to Rs 4,950. The engine compensation has offset higher operational costs, leading to this adjustment. However, they have reduced their FY25/26 EPS estimates by 2-3 percent to account for increased non-fuel costs and taxes.

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Goldman Sachs maintains a 'buy' call on IndiGo with a target price of Rs 4,800 per share. The company anticipates a reduction in groundings by the end of FY25. For Q2, IndiGo expects high single-digit year-over-year Available Seat Kilometre (ASK) growth.

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IndiGo is the world's third-largest carrier in the world. The airline has come up the ranks quickly to attain the spot. In December last year, it surpassed United Airlines to become the sixth-largest airline in the world. Data shows that Delta Air and Ryanair Holdings are the top two airlines.

At about 9:50 am, shares of the company were trading at Rs 4,421 apiece, down 1.6 percent from the close on the NSE. IndiGo shares have been on a stellar run, rising nearly 50 percent since the start of the year.

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