IndiGo Shares In Focus As Kotak Institutional Equities Cuts Target Price — Here's Why
Kotak Institutional Equities also listed ongoing scrutiny by the regulator and the CCI as key downside risks.
Shares of Interglobe Aviation Ltd, operator of India's largest airlines IndiGo, will be in focus heading into trade on Monday following a latest note from Kotak Institutional Equities.
The brokerage firm has cut the target price on IndiGo, citing cuts in fair value on the back of changes in crude and currency assumptions.
Kotak Institutional Equities' assessment comes in the wake of a rapidly changing global scenario when it comes to crude supply chain, with the United States recently gaining control of Venezuela's vast oil reserves after capturing leader, Nicolas Maduro.
Iran, another key player in global oil supply, has been engulfed in nationwide protests as well, with Donald Trump recently offering support to protestors against the Ayatollah Khomeini-backed government.
Kotak Institutional Equities also listed ongoing scrutiny by the regulator and the CCI as key downside risks.
Keeping that in mind, the brokerage firm has retained an 'add' rating while cutting the target price from Rs 5,350 to Rs 5,300.
However, Kotak also highlighted some of the positives for IndiGo airlines, including a steady domestic performance, though the firm noted it has seen limited competitive moves from the airlines so far.
Kotak Institutional Equities also highlighted that IndiGo has continued to make inroads in a tough market on pricing.
But the company is awaiting more clarity on free pricing and forced changes in market structure. The road, therefore, could prove to be important for IndiGo airlines.
It must be noted that IndiGo is expecting no growth in the third quarter of the financial year ending March 2026 amid slowing capacity expansion and the impact of cancellations that rocked the airline last month.
Out of 26 analysts tracking the company, 20 maintain a 'buy' rating, three recommend a 'hold,' and three suggest 'sell,' according to Bloomberg data. The average 12-month consensus price target of Rs 5,948.83 implies an upside of 22.8%.
