IndiGo shares jump 4%, scales to another record high on healthy outlook

Over the past month, IndiGo shares have surged more than 13 percent

Shares of InterGlobe Aviation, which operates IndiGo airline extended gains to the second day, rising as much as 4 percent to hit fresh record high of Rs 5,187 per share. Brokerages largely remain bullish on the airline operator as the management guided doubling of capacity over the next 5 years.

Over the past month, IndiGo shares have surged more than 13 percent, significantly outperforming the Nifty 50 index, which has edged up by just 0.6 percent in the same period.

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IndiGo aims to increase its international capacity share to 40 per cent by FY30, expanding beyond its traditionally strong domestic network. It is targeting underserved international routes through long-range aircraft and codeshare partnerships, positioning itself as a preferred airline for international travelers.

Brokerage firm Kotak Institutional Equities shared a "buy" rating for IndiGo, setting a target price of Rs 5,700 per share - indicating a potential 10 percent gain from current levels.

Analysts highlighted IndiGo’s strong cash reserves as a major advantage, allowing the airline to invest in new ventures, digital transformation, global expansion, and shareholder rewards. The airline’s widespread domestic network also ensures most Indians can travel within a day.

IndiGo continues to dominate the Indian aviation sector, further increasing its market share to a record 65.2 percent in January 2025. This represents a month-on-month (MoM) growth of 80 basis points (0.8 percent), underscoring its strong grip on the domestic market, as noted by analysts at Emkay Global Financial Services in their latest sector update.

Meanwhile, fuel costs, a critical factor for airline profitability, are expected to remain relatively stable in March 2025. Analysts project that a 4 percent decline in crude oil prices MoM will be largely counterbalanced by an 18 percent rise in jet fuel spreads, along with the impact of a weaker rupee.