Motilal upgraded the stock to ‘Buy’ from its earlier recommendation of “Neutral’ and also raised its price target on the stock by 30% to ₹6,550 from ₹5,050 per share earlier.
The revised price target from Motilal implies a potential upside of 27% from Friday’s closing levels.
The brokerage believes that benign Brent crude prices amid the ongoing geopolitical turmoil and favorable domestic demand bode well for the company.
According to Motilal, IndiGo has been on an upward trajectory after Covid – gaining market share in the domestic market (aided by the insolvency of GoFirst in May 2023), expanding its international and cargo business, adding new destinations and routes, signing codeshare agreements, and procuring delivery of aircraft from OEMs.
These factors have helped the company maintain profitability for the past two years and will continue to drive its performance in the coming years.
Further, Motilal said that IndiGo has adopted a completely different operational strategy after Pieter Elbers joined the company as the new CEO in September 2022. He has over 30 years of experience working at different positions at KLM Royal Dutch Airlines. His wealth of experience has not only helped IndiGo compete with global majors but also consistently increase its market share in the domestic market. This could also pose as a ‘Key Man’ risk, the brokerage noted.
IndiGo is also focusing on strengthening its global presence via loyalty programs and proactive brand-building efforts while continuously refining schedules to enhance reliability and attract a larger share of international travelers.
Key downside risks, as per the brokerage, include delays in wide-body aircraft deliveries or rising AOGs; sharp volatility in crude or rupee could pressure margins if not passed on; a higher share of business-class seating or premium fleet may dilute IndiGo’s cost advantages.
The brokerage estimates an EBITDA CAGR of 28% and a PAT CAGR of 38% over FY25–27E.
IndiGo shares are currently trading at 20 times their estimated FY26 earnings and 9.7 times FY26 EV/EBITDA.
With this upgrade, Motilal Oswal has become one among the 19 analysts, who have a ‘Buy’ recommendation on the stock, out of the 23 analysts that have coverage on the counter.
Two each have a ‘Hold’ and a ‘Sell’ recommendation on the stock.
Shares of Interglobe Aviation Ltd. are currently trading 2.29% higher at ₹5,269. The stock has risen 15% so far in 2025.
