Motilal Oswal Sees 22% Upside in IndiGo Stock Despite Recent Challenges
Motilal Oswal maintains 'Buy' on IndiGo with ₹6,300 target, forecasting 22% upside despite near-term disruptions.
InterGlobe Aviation Ltd., the parent company of IndiGo, is expected to maintain its leadership in India’s aviation market despite recent operational disruptions, according to Motilal Oswal. The brokerage highlighted India’s growing travel and tourism sector as a key driver supporting the airline’s long-term dominance.
Motilal Oswal reiterated its ‘Buy’ rating on IndiGo with a target price of ₹6,300, implying a 22 per cent upside from the previous close. While the stock has declined 12.6 per cent this month, it remains up 13.2 per cent for the calendar year, outperforming the Nifty50 gain of 10.5 per cent.
The brokerage noted that near-term challenges, including flight cancellations, capacity reductions, and rupee depreciation, are likely to affect third-quarter financials. However, these short-term pressures do not change the airline’s long-term growth thesis, supported by its extensive domestic network and expanding international connectivity.
Also Read: India Reviews Copyright Law for Generative AI Challenges
IndiGo has lowered its third-quarter FY26 guidance, expecting capacity growth in available seat kilometres to be in the high single digits to low double digits, down from previous high-teens projections. Passenger revenue per seat kilometre is now anticipated to decline by mid-single digits year-on-year, reflecting the impact of recent operational disruptions.
Despite these challenges, Motilal Oswal emphasized that IndiGo’s market leadership remains intact. The airline continues to hold over 60 per cent of the domestic market, supported by a strong fleet expansion pipeline, efficient operations, competitive pricing, and the addition of new domestic and international destinations.
CEO Pieter Elbers reassured employees that “the worst is behind us” following widespread cancellations earlier this month, which affected over 4,200 flights, nearly 23 per cent of the company’s daily schedule. Additionally, IndiGo’s recent inclusion in the Sensex, replacing Tata Motors Passenger Vehicles, is expected to further bolster investor confidence and attract passive fund inflows.
Also Read: President Murmu Highlights ‘Vasudhaiva Kutumbakam’ as Key to Global Unity Amidst Today's Challenges
