IndiGo shares were trading more than a percent lower on May 24, a day after the airline announced that it swung to a profit in FY24 after four years of consecutive losses. After InterGlobe Aviation, IndiGo’s parent, beat on Q4 result estimates, at least two global brokerages raised their target price on the aviation stock.
Morgan Stanley has raised the target price on IndiGo shares to ₹5,142, implying it sees a potential upside of more than 16% from the closing price of May 23. The brokerage, which has an overweight stance on the firm, believes the company is set to change over the next few years, with loyalty programmes, business class and long-haul international planned.
It pointed out that change may involve near-term cost pressures but the company has the right strategy, as the consumer is also evolving. Meanwhile, it expects inflationary pressure to rise.
Morgan Stanley noted that the firm’s earnings before interest, taxes, depreciation, and amortisation or EBITDA in the fourth quarter was 10% ahead of its estimate.
Also Read: IndiGo reports record ₹8,172-crore profit for FY24, sees 6th straight profitable quarter
Jefferies has a hold rating on the IndiGo stock and has raised the target price to ₹4,150. This, however, still implies a 5% downside.
It highlighted that the Q4 beat was led by a strong 7% year-on-year uptick in yields offsetting cost pressures.
In another surprise move, IndiGo talked about launching business-class services by 2024 end, the brokerage said. Yield and spreads continue to benefit from a constrained capacity environment, Jefferies said, adding it believes a stellar run in the stock factors in positives.
Motilal Oswal, on the other hand, has given IndiGo shares a neutral rating and expects it to slip ₹4,210.
Also Read | IndiGo to start business class on select routes: CEO Pieter Elbers
“Currently, IndiGo’s 70-80 aircraft are grounded due to P&W engine issues and the management believes this number would be range-bound. However, the management is confident of adding one aircraft per week on an average in FY25, with capacity and passenger growth guidance intact in the mid-teens for FY25,” it pointed out.
It added that the management has also been taking several pre-emptive measures to increase its global brand awareness, as it expects to capture a bigger share of growth from its international market in the coming years.
IndiGo shares traded 1.5% lower at ₹4,333.35 on NSE at 10:32 am.
Morgan Stanley has raised the target price on IndiGo shares to ₹5,142, implying it sees a potential upside of more than 16% from the closing price of May 23. The brokerage, which has an overweight stance on the firm, believes the company is set to change over the next few years, with loyalty programmes, business class and long-haul international planned.
It pointed out that change may involve near-term cost pressures but the company has the right strategy, as the consumer is also evolving. Meanwhile, it expects inflationary pressure to rise.
Morgan Stanley noted that the firm’s earnings before interest, taxes, depreciation, and amortisation or EBITDA in the fourth quarter was 10% ahead of its estimate.
Also Read: IndiGo reports record ₹8,172-crore profit for FY24, sees 6th straight profitable quarter
Jefferies has a hold rating on the IndiGo stock and has raised the target price to ₹4,150. This, however, still implies a 5% downside.
It highlighted that the Q4 beat was led by a strong 7% year-on-year uptick in yields offsetting cost pressures.
In another surprise move, IndiGo talked about launching business-class services by 2024 end, the brokerage said. Yield and spreads continue to benefit from a constrained capacity environment, Jefferies said, adding it believes a stellar run in the stock factors in positives.
Motilal Oswal, on the other hand, has given IndiGo shares a neutral rating and expects it to slip ₹4,210.
Also Read | IndiGo to start business class on select routes: CEO Pieter Elbers
“Currently, IndiGo’s 70-80 aircraft are grounded due to P&W engine issues and the management believes this number would be range-bound. However, the management is confident of adding one aircraft per week on an average in FY25, with capacity and passenger growth guidance intact in the mid-teens for FY25,” it pointed out.
It added that the management has also been taking several pre-emptive measures to increase its global brand awareness, as it expects to capture a bigger share of growth from its international market in the coming years.
IndiGo shares traded 1.5% lower at ₹4,333.35 on NSE at 10:32 am.
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