IndiGo shares rise 3% after airline raises FY26 capacity growth target: Should you buy, sell or hold?

The net loss included the impact of currency movement on dollar-denominated future obligations. Excluding forex impact, IndiGo reported a net profit of Rs 104 crore, compared with a net loss of Rs 754 crore last year.

Despite the widening net loss, the firm’s revenue from operations rose 9.3 percent year-on-year (YoY) to Rs 18,555.3 crore in Q2 FY26, supported by higher passenger traffic and improved yields. Its total expenses increased 18.3 percent to Rs 22,081.2 crore, driven primarily by foreign exchange costs and higher operating expenses. The largest addition to expenses came from foreign exchange losses, which swelled 12 times over to Rs 2,892 crore.

Motilal Oswal on IndiGo:

Motilal Oswal maintained its ‘Buy’ rating on the stock, with a target price of Rs 7,300 apiece. This implies an upside potential of more than 29.5 percent from the stock’s previous closing price.

“Due to higher-than-expected currency depreciation, slower reduction in aircraft on the ground, and additional damp leases, the company expects an early single-digit increase in unit cost (ex-fuel and forex) in FY26 vs. FY25. However, management remains confident about a healthy international as well as domestic demand outlook, backed by an under-penetrated aviation market with favorable long-term demand,” the domestic brokerage said.

Motilal added that the company has upgraded its FY26 capacity growth guidance to mid-teens from double digits, looking at the long-term tailwinds. “Further, the capacity expansion is focused more internationally to provide geographical diversification against foreign exchange losses. We cut our FY26 earnings estimates by 23% (due to forex losses), while we largely retain our FY27/FY28 estimates,” it further said.

PL Capital on IndiGo:

PL Capital also maintained its ‘Buy’ rating on the stock, with a target price of Rs 6,332 apiece. This implies an upside potential of more than 12 percent from the stock’s previous closing price. The domestic brokerage cut its EPS estimates by 3 percent/6 percent/3 percent for FY26E/FY27E/FY28E as it realigns its FX assumptions amid sharp rupee depreciation.

“While we foresee inflation seep into the cost structure in FY26E, we draw comfort from positive commentary on pricing (PRASK to remain flat/grow marginally in 3QFY26E) and upward revision in ASKM growth guidance to early teens for FY26E. We expect sales/EBITDAR CAGR of 12%/11% over FY25-FY27E and retain BUY on the stock with TP of Rs6,332 (11x FY27E EBITDAR; no change in target multiple),” it said, while adding that excess FX and ATF volatility are key risks to its call.

IndiGo share price history:

IndiGo shares have gained more than 2 percent in the past one month, and over 9 percent in the past six months. The stock is up more than 26 percent in 2025 so far.

Its P/E ratio currently stands at over 32.

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