- Jefferies keeps Buy rating on IndiGo but lowers target price to Rs 6,035 from Rs 7,025
- IndiGo faces capacity and crew constraints affecting peak season performance and near-term guidance
- FY26–FY28 EPS estimates cut by 13–53% due to slower ramp, yield moderation, and cost pressures
Jefferies has maintained its Buy rating on InterGlobe Aviation (IndiGo) while reducing the target price to Rs 6,035 from Rs 7,025, reflecting near-term operational and earnings headwinds following recent business disruptions.
As anticipated by the brokerage firm, IndiGo trimmed near-term guidance, citing capacity and crew constraints that affected performance during the peak travel season. Jefferies believes the operational scale-up from here will depend on timely fleet induction and pilot sufficiency which are both critical to restoring schedule reliability and defending market share.
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Jefferies has cut FY26–FY28 EPS estimates by 13–53%, incorporating a slower capacity ramp, potential yield moderation, and transitory cost pressures.
The brokerage still maintains a constructive medium-term view supported by IndiGo's strong execution track record, disciplined growth strategy, robust balance sheet, and international expansion, particularly wide-body/long-haul linkages and deeper regional connectivity.
Importantly, Jefferies believes that the recent stock correction has already priced in the disruption during peak season. With supply normalising and crew pipelines strengthening, IndiGo still remains well-placed to capitalise on domestic demand and international network opportunities.
Despite lowered estimates and TP, Jefferies' Buy stance stands on structural strengths and long-term growth drivers. Execution on fleet and crew ramp-up will be pivotal for a clean recovery trajectory and re-rating potential.
IndiGo Crisis
Meanwhile, Aviation watchdog DGCA stepped up scrutiny of the crisis-hit IndiGo with its officials stationing themselves at the carrier's headquarters to monitor the operations. The civil aviation ministry has also directed the airline, which generally operates around 2,300 flights, to reduce its winter schedule by 10%.
IndiGo, in a regulatory filing, said that CEO Pieter Elbers has been asked to appear on December 12, before the Committee of Officers at DGCA, which is examining the matter related to flight disruptions.
With the operations slowly stabilising, IndiGo said it will offer travel vouchers worth Rs 10,000 to each passenger whose flights were cancelled or delayed for long during December 3-5. The vouchers can be used for flights in the next 12 months. While thousands of passengers were impacted, it was not immediately clear how many passengers will be getting the compensation.
(with inputs from PTI)
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