Target price: ₹7,000
CMP: ₹5,839.25
Nailing the LCC model, has managed to capture its home market achieving about 64.4 per cent share, supported by a fleet of 416 aircraft and an orderbook of 910 aircraft.
Unlike major aviation markets (USA, China, Europe) where a clear oligopoly exists among top 3-4 players, IndiGo changed India’s scenario with a near-monopoly, due to key factors including superior fleet size, a low cost, high efficiency model, gradual weakening of competition and consistent fleet addition even amid supply-chain issues.
Notwithstanding a weak H1-FY26, we expect a strong H2 due to festive season and higher discretionary spends prompted by GST rate cuts and this sustained demand trajectory is expected to continue going forward as well.
Going forward, we believe IndiGo would continue to maintain its current domestic market share owing to robust orderbook (910 aircraft), adequate cash balance to counter short-term exigencies, while consistently improving its share on international front (vs. current 19.3 per cent).
We believe IndiGo to be a long-term compounding story supported by disciplined low-cost model, India market dominance, strategic expansion, healthy balance sheet and robust long-term growth prospects. Hence, we initiate coverage with a Buy rating, at a 12-month TP of ₹7,000.
Key risks. Aircraft production delays, volatile crude prices, rupee depreciation, external factors curtailing demand.