During a seasonally weak quarter, IndiGo had strategically optimised its capacity (only 8% growth YoY in Q2 ASK) allocation to ensure the right flights were available in the right markets, at the right times. However, the company benefitted from decent fares – stabilisation in Jul’25 and recovery through Aug/Sep’25.
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ICICI Securities Report
We maintain our constructive view on Interglobe Aviation Ltd. The key premise has been that a structurally lower supply industry situation in the medium term is a bigger investment thesis, despite any short-term possible demand blip.
The same has also been ratified from an impressive yield showing in H1 FY26 and a steady guidance for Q3. Spreads are expected to get a boost from steady crude price, partially offset by management’s guidance of low-single-digit growth in CASK ex-fuel (earlier was flat).
We back the prospects of yield to remain steady, which should be able to offset cost escalations while better volume growth could lead to further market share gain by IndiGo.
Capacity management through lower deployment in Q2 and higher in Q3/Q4 is also supporting FY26 EPS. We believe that benefits of active capacity management remain underappreciated by investors.
Commentary and progress on internationalisation and premiumisation point to IndiGo’s firm execution. The combination of business class introduction, loyalty programme, accelerated long-haul foray with wide-body aircraft and induction of XLR underline possible new market/segment opportunities are picking up pace.
Retain Buy.
Key risks include demand decline and adverse geopolitical events.
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Also Read: 3M India Q2 Review: ICICI Securities Raises Target Price After Stellar Quarter — Check Details
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