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ICICI Securities Report
ICICI Securities has maintained Buy rating on Interglobe Aviation Ltd. with an unchanged target price of Rs 5,210 based on 25x (unchanged) FY28E earnings per share of Rs 208 (post-full tax).
IndiGo's FY26 result has underlined that demand remains strong, despite a host of challenges spanning internal/external disruptions and cost escalations throughout the year. This reinforces brokerage's positive thesis on IndiGo— reiterating the theory of a structural supply deficit which allows the airline to register healthy yields time to time. However, FY27 will likely remain a high-cost year, especially H1.
This results in ~12% YoY reduction in our FY27E PBT before other income. Notably, very strong growth in other income (a CAGR of 47% over the last three years, including hedging gains) has structurally improved the resilience of IndiGo's financials, serving as one of its key moats.
While ICICI Securities' FY28E profit remains unchanged, the brokerage has upgraded IndiGo's FY27 estimates based on lower crude oil price assumptions and better revenue per available seat kilometre, driven by healthy demand commentary.
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