Shares of InterGlobe Aviation, the parent of IndiGo, advanced for a third straight session on Monday as signs of operational normalisation emerged after several days of disruption.
On the National Stock
Exchange, the stock rose 2.35 percent to Rs 4,974.50 per share. Over the last three trading sessions, the scrip has gained nearly 3 percent. During the session, it touched an intraday high of Rs 5,014, marking a gain of 3.16 percent.
IndiGo has been under scrutiny from the government and passengers following the cancellation of hundreds of flights, which the airline attributed to changes in flight duty time limitation (FDTL) norms for pilots.
On the outlook, HSBC reiterated its ‘Buy’ rating on the stock, saying IndiGo’s long-term structural growth story remains intact. However, the brokerage lowered its target price to Rs 5,977 per share, implying an upside of more than 20 percent from the previous close.
HSBC flagged near-term headwinds from large-scale cancellations, tighter FDTL norms and reputational impact. That said, it noted IndiGo’s cost leadership and limited peer capacity growth indicate no structural damage to the business. The brokerage estimates staff costs could increase by nearly Rs 45 crore, taking total staff expenses to around Rs 90 crore due to the revised norms. While some reputational impact is likely in international markets, HSBC expects it to be temporary.
UBS also maintained a ‘Buy’ call but trimmed its target price to Rs 6,350 per share, citing inadequate preparedness for the revised FDTL norms that led to significant operational disruption.
Jefferies, meanwhile, retained its ‘Buy’ rating with a target price of Rs 7,025 per share. The brokerage said IndiGo has been among the most affected by the new FDTL rules, which lower pilot duty hours and increase crew requirements. It added that the regulatory changes coincided with the airline’s capacity expansion, technical issues and airport congestion, resulting in cascading disruptions.
