Shares of InterGlobe Aviation, which operates IndiGo Airline, hit an all-time high of ₹ 5,199.50, as they surged 4per cent on the BSE in Tuesday’s intra-day trade on healthy outlook. The stock surpassed its previous high of ₹ 5,177.90 touched on March 28, 2025.
In the past one month, the stock has rallied 12 per cent on expectations of strong passenger growth outlook in the January to March 2025 quarter (Q4FY25). In comparison, the BSE Sensex was up 0.7 per cent during the same period.
IndiGo is one of the most efficient low cost air carriers (LCCs) with a market share of 62 per cent in the Indian aviation sector. It is amongst the fastest growing low-cost carriers in the world. It had a fleet of 437 aircraft and provided scheduled services to 89 domestic and 34 international destinations as of December 31, 2024.
Since January 22, 2025, the stock price of IndiGo has zoomed 32 per cent after the company reported a better than expected 14 per cent year-on-year (YoY) growth in revenue, led by a 13 per cent YoY rise in passenger volumes in October to December 2024 quarter (Q3FY25). The company touched new milestones – operated a peak of 2,200 daily flights and served a record 31.1 million passengers during the quarter.
Earnings before interest, tax, depreciation and amortization (EBITDA) was flat due to higher forex loss on account of INR depreciation, higher lease expenses, costs due to grounding of aircraft and airport fees.
The management expects this robust demand growth to continue in coming quarters. Expansion of Cargo operations supported ancillary revenue. The management guided to a healthy demand outlook and Indigo beating sector estimates with Q4 ASK (available seat per kilometer) growth of 20 per cent YoY (on a low base, though).
Indigo’s strategic vision emphasizes a strong expansion trajectory, with an anticipated aircraft addition of 1 aircraft per week. As of December 31, 2024, the airline’s fleet comprises of 437 aircrafts, which it plans to take to 600+ aircrafts by 2030. The airline remains well on-track to achieve this with a pending orderbook of 900+ aircrafts (aircrafts ordered in 2019 still coming in), reflecting sustained capacity expansion, analysts at JM Financial Institutional Securities said in the management meet update on March 19, 2025.
Indigo plans to take its passenger traffic (PAX) per year from 118 million in FY25E to 200 million in FY30. Indigo plans to achieve this while maintaining its cost leadership via large orders to reduce ownership costs, new generation aircrafts to reduce fuel consumption and higher aircraft utilization. In order to increase its international presence, the company plans to add more destinations across regions and take its international capacity share from ~28 per cent currently to 40 per cent by FY30, the brokerage firm said.
Analysts at Emkay Global Financial Services have ‘Buy’ rating on IndiGo with a target price of Rs 6,000 per share. While the brokerage firm believes Q4 would have an impact of Maha Kumbh, FY26 ASK/PAX growth guidance is set at early double digit, which seems conservative.
“IndiGo’s CY25 analyst day underpinned the burgeoning aviation opportunity in India viz a rising domestic base with higher spending power (leading to over 16 per cent pax compound annual growth rate (CAGR) during CY25-30E), strategic location for building a major hub (with new NCR-MMR airports in the next 3-4 months), and a large Indian diaspora boosting international foray (which is highly limited for Indian carriers currently),” Emkay Global Financial Services said.
Nevertheless, with moderation in oil prices, spreads are likely to expand. The brokerage firm raised its FY25E R-EPS by 3 per cent, building in current forex rates while slightly tweaking FY26/27E by 1-2 per cent each. However, on the back of positive sector outlook, Indigo’s continued dominance and upside optionality like business class, cargo, and more importantly international, analysts raised target PE multiple to 22x from 20x and rollover to Mar-27E EPS.
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