Feb'25 View on Interglobe Aviation Ltd

nterglobe Aviation Ltd (Indigo) is India’s largest passenger airline operating as a low-cost carrier. Serving 86 destinations including 24 international destinations, it provides passengers with a simple, unbundled product, fulfilling its singular brand promise of providing “low fares, on-time flights, and a courteous and hassle-free service” to its customers. IndiGo commenced operations in August 2006 with a single aircraft and has grown its fleet to 262 aircrafts. After making a high near 5,000 level the stock is making a consolidation between 3850 and 4700 and now at 4,300 and looking to breakout above 5,000 to touch 5,400 in near term due to following points. • Positive themes include accelerated entry into the international long-haul market. • International: Indigo appears to have breached the 20% market share handle in recent months. • Indigo’s next few years will be defined by select key battles. • In the near term, it needs to pass on lumpy cost inflation in FY26. • In the medium term, it needs to defend its turf in non-metro routes. • Indigo is likely to emerge as a more diversified/cost-efficient play on air travel over time. • We expect earnings per share of Rs236.3 in FY26E and Rs259.2 in FY27E. • We increase our FV to Rs5,400 on higher 21x multiple and unchanged estimates.