IndiGo shares hit record high; brokerage sees 12% potential upside

Shares of InterGlobe Aviation Ltd, IndiGo's parent, moved 0.81 per cent higher during intraday deals on Thursday to scale their all-time high of Rs 3,573.70. The stock eventually shed 0.02 per cent to settle at Rs 3,544.50. Brokerage Prabhudas Lilladher (PL) has retained its 'Accumulate' call on the counter with a target price of Rs 3,961, suggesting a potential upside of 11.75 per cent.

PL mentioned that IndiGo plans to add more than one aircraft per week, increase capacity by early double-digits, expand the network by launching 10 new destinations and add 5,500-6,000 employees in FY25E.

Despite escalation in engine issues at P&W, growth guidance of early double digits is an indication IndiGo is well placed to mitigate supply chain challenges, it stated. Current aircraft order book the airline is around 960 and steady delivery is expected from the recent order of 500 aircrafts placed in 2023, PL added.

"India is one of the fastest growing aviation markets globally and the aviation passenger traffic is likely to double to 51 crore in FY30E. In addition, the count of airports is likely to rise to 220. Strong growth in aviation industry is likely to result in huge financing and MRO opportunities in India," it further stated.

PL also highlighted yield is likely to register growth in Q4 FY24 versus an earlier expectation of being flat.

IndiGo aims to double in size by 2030 with new domestic and international routes as well as destinations, its chief Pieter Elbers said as the airline pursues soaring global ambitions to match India's economic growth potential.

The country's largest airline with a domestic market share of little over 60 per cent is also betting big on A321 XLR aircraft that are expected to be part of its fleet "somewhere in 2025", to further expand its overseas presence.

For the next financial year starting April 2024, the IndiGo chief said the capacity guidance in terms of seat capacity is "early double digits" and one plane is coming in every week.

At present, IndiGo has codeshares with Turkish Airways, British Airways, Qatar Airways, American Airline, KLM-AirFrance, Qantas, Jetstar, and Virgin Atlantic.

Codesharing allows an airline to book its passengers on its partner carriers and provide seamless travel to various destinations.

 

(With inputs from PTI)