IndiGo Q1 Review — Muted Show; Forward-Looking Guidance Remains Intact, Says Motilal Oswal Maintaining 'Buy'

IndiGo is shifting to finance leases to enhance asset control and enable end-of-term ownership, aligning with its maintenance, repair, and overhaul strategy. Its partnership with BIAL for a dedicated maintenance facility will improve aircraft availability and drive cost efficiency.

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Motilal Oswal Report

Despite geopolitical disruptions and operational headwinds in recent quarters, Ingerglobe Aviation Ltd. has demonstrated resilience through cost control, strong network execution, and steady passenger growth. Stabilizing fuel costs, the return of grounded aircraft to service, and improved demand are expected to drive performance in the coming quarters.

Backed by early double-digit capacity growth, stable yields, a rising international mix (currently ~30% of available seat kilometres), and improving operating leverage (from reduced damp leases and expanding wide-body routes), IndiGo is well-positioned to sustain healthy profitability.

We broadly retain our earnings estimates and expect its revenue/ Ebitda/adjusted profit after tax to clock a CAGR of 9%/13%/18% over FY25-27.

We value the stock at 11xFY27E Ebitdar to arrive at our target price of Rs 6,900. Reiterate Buy.

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