IndiGo shares gain over 4% after DGCA fine; Jefferies highlights the next areas of focus

Shares of Interglobe Aviation Ltd., the parent company of IndiGo, surged as much as 5% on Monday, January 19, after brokerage firm Jefferies raised its price target on the stock.

The brokerage reiterated its 'Buy' rating and increased the price target to ₹6,140, implying an upside of about 30% from the previous closing level.

The revised target is just 1.3% below IndiGo's 52-week high of ₹6,225.05, which it hit on August 18, 2025.

Trading activity was strong, with around 19 lakh shares changing hands at an average price of ₹4,908.75, translating into a turnover of roughly ₹933 crore.

Jefferies mentioned that the DGCA has fined IndiGo ₹22.2 crore for disruptions in December 2025 and directed the airline to furnish a ₹50 crore bank guarantee.

The regulator cited over-optimisation, weak preparedness, software gaps and management lapses, while issuing warnings to senior executives. It also acknowledged the airline's swift recovery following the disruption.

The brokerage said the fines appear modest, likely due to regulatory caps, and added that attention will now turn to the DGCA's subsequent guidance on normalising IndiGo's schedules after compliance milestones are met.

Jefferies commentary comes a few days after DGCA confirmed that all refunds for IndiGo flights cancelled between December 3 and 5, 2025 have now been processed and returned to the original mode of payment.

Jefferies also pointed out that disciplinary warnings were issued to senior IndiGo executives including the CEO and COO. The SVP of Operations Control Center was removed from accountable roles, and DGCA asked the airline to take further internal action against others.

The brokerage further highlighted that DGCA acknowledged IndiGo’s operational turnaround as “noticeably swift,” with schedules stabilising quickly and voluntary care vouchers/refunds extended to passengers.

According to Jefferies, the “focus now shifts” to whether DGCA will continue its 10% schedule cut through the winter or permit a normalisation of operations once compliance milestones are certified.

“Accordingly, the focus now shifts to DGCA’s subsequent guidance on the normalisation of schedules once compliance milestones & systemic reforms are independently validated,” the note added.

Also read: DGCA says all refunds for IndiGo flight cancellations from Dec 3-5 have been fully processed

The December operational disruption traces back to the implementation of the revised FDTL norms on November 1, 2025, which led to a pilot shortage and ultimately triggered more than 3,500 cancellations in early December.

DGCA stepped in with temporary measures such as capped fares, enforced refunds, and increased compliance scrutiny. The fallout extended into January alongside a parallel CCI probe.

Besides Jefferies, other major global brokerages including Goldman Sachs and BofA have reiterated their ‘Buy’ stance for the stock despite the 15% drop in IndiGo’s market value during the crisis, pointing to its dominant around 60% market share and low-cost operating structure.

The commentary precedes IndiGo’s December quarter earnings, scheduled for January 22.

On the financial front, IndiGo posted a consolidated net loss of ₹2,582 crore in Q2 FY26, more than 2.5x higher than ₹986.7 crore a year earlier, as costs outpaced revenue. Revenue from operations rose 9.3% year-on-year to ₹18,555.3 crore for the July–September quarter, driven by higher passenger volumes and better yields.

Read More: IndiGo Q2 loss widens to ₹2,582 crore on high forex loss, rising maintenance costs