IndiGo shares snap seven-day losing streak but analysts expect stock to remain volatile

Shares of InterGlobe Aviation Ltd., the parent of IndiGo and India's largest airline, will remain in focus on Tuesday, December 9, after the stock emerged as the top loser on the Nifty 50 on Monday.

IndiGo logged its steepest single day fall since February 2022 and has now entered its seventh straight session of losses, marking its longest losing streak since February 2023.

Trading activity was unusually high, with volumes hitting a seven month peak. Nearly 1.58 crore shares changed hands compared to the 20 day average of 12.1 lakh. Delivery volumes were also sharply higher at 71.7 lakh shares versus the 20 day average of 7.3 lakh.

The stock has now shed almost ₹40,000 crore in market value over this seven day slide.

What brokerages say

BofA Securities, which has a 'Buy' rating and a target price of ₹6,600, has cut its Q3 net income estimate by 9% due to capacity loss from cancellations. The brokerage said unit costs are rising as fixed expenses and disruption-related costs add pressure.

It also said that tighter rostering norms from 2026 could increase pilot requirements and lift labour costs by about 10%.

BofA has trimmed its FY26-28 earnings estimates by 7%, resulting in a marginally lower target price of ₹6,600 per share.

Goldman Sachs also maintains a 'Buy' call with a target of ₹5,700, citing the airline's dominant market position and lowest-cost structure.

The brokerage said the impact of higher pilot costs in FY27 and changes to regulatory norms remains an evolving situation. It added that it will closely track the airline's measures following the recent operational disruption.

Goldman Sachs said IndiGo continues to have the strongest visibility on fleet additions and benefits from a rapidly expanding aspirational travel base in India. Its earnings revisions have brought its implied valuation down to ₹5,700 from ₹6,000 earlier.

The brokerage expects the stock to remain volatile until there is greater clarity on any potential regulatory action against the airline.

DGCA receiveds IndiGo's response

Meanwhile, the aviation regulator DGCA has received IndiGo's response to its show cause notice issued after the large scale disruptions and cancellations. The airline said it is "not possible to pinpoint exact causes yet" and has sought more time to complete a full root cause analysis.

IndiGo highlighted multiple preliminary triggers such as minor technical issues, winter schedule changes, adverse weather, system congestion and crew rostering challenges under FDTL Phase II.

The airline added that it had already been in discussions with the DGCA regarding the operational difficulties posed by the new pilot rest norms and was seeking variations or extensions.

These compounding issues, IndiGo said, began impacting on time performance in early December and eventually hit crew availability. On December 5, the airline undertook what it termed a "drastic step", a network reboot involving mass cancellations to ease congestion and reposition aircraft and crew.

Investor sentiment weakened further after Moody's described the ongoing disruptions as "credit negative," cautioning that IndiGo may face revenue losses due to customer refunds, compensation payouts and possible regulatory penalties.

The carrier commands nearly 65% of India's domestic aviation market, and the disruptions have cast a shadow on expectations of an earnings recovery already strained by higher ATF prices and a weakening rupee.

Jefferies said that IndiGo is also dealing with elevated crew costs and currency pressures. The brokerage added that IndiGo's lean, high utilisation model has been particularly affected by the new pilot rest rules that prevent airlines from substituting weekly rest with leave.

InterGlobe Aviation shares closed 8.62% lower on Monday at ₹4,907.50. The stock has dropped more than 15% over the last five sessions.