Brokerages such as Goldman Sachs and Bank of America Securities have put out a cautious note on Interglobe Aviation, the listed entity for IndiGo Airlines, which has come under fire following flight disruptions that led to over 2,000 cancellations in the past few days.
The stock faced immense pressure on Monday's trade, falling more than 8% after brokerages' massive financial impact of the recent disruption.
Brokerages have maintained a similar tone heading into Tuesday's trading session, with BofA Securities notably estimating 9% cuts to Q3FY26 net income.
This comes on the back of IndiGo losing a fortune due to a myriad of cancelled flights. Moreover, the government said the airline spent over Rs 610 crore on issuing refunds to affected customers.
Although BofA acknowledged that flight disruption woes have passed the worst, rostering cost headwinds could continue to linger for the airline.
This is coupled with higher labour costs, regulatory risks and pricing issues. As a result, BofA, despite maintaining a 'buy' call on IndiGo, has slashed the target price from Rs 6,700 to Rs 6,600.
Goldman Sachs, on the other hand, believes IndiGo's industry position remains unchanged despite the flight disruption that has not only financially hurt but has also impacted customer sentiment.
Goldman Sachs expects the IndiGo stock to remain volatile until there is any clarity surrounding regulatory action against the airline, given that the rostering issue emerged from an internal planning failure, as claimed by Aviation Minister Ram Mohan Naidu.
Keeping that in mind, the brokerage firm has cut the target price on IndiGo from Rs 6,000 to Rs 5,700 while maintaining a 'buy' call on the counter.
The coming days, therefore, could be vital as IndiGo looks to avoid facing any regulatory penalties that may put further pressure on the stock.
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