HSBC Raises IndiGo Target Price, Predicts Strong Future

Mumbai, India — HSBC Global Research has increased its target price for InterGlobe Aviation Ltd., parent company of IndiGo, from Rs 5,975 to Rs 6,650. This marks a potential upside of 21.3%, as the brokerage maintains its ‘buy’ rating based on the airline’s solid strategies.

According to HSBC, IndiGo’s strategic expansion into domestic routes that extend beyond competitive markets is proving effective. The airline has decreased its dependency on its top 15 domestic routes, which now make up only 20% of its capacity, down from 30% in 2019. Additionally, IndiGo holds around 66% of its domestic capacity market share, increasing from 53% in 2022.

HSBC noted that demand has rebounded nearly fully after a dip in April and May due to geopolitical tensions. While fare rates on some routes are lower, the overall outlook remains promising due to limited capacity in the market.

On the international front, HSBC sees promise in IndiGo’s plans to enter global markets, despite some obstacles in execution. The airline benefits from cost advantages, experienced leadership, and a favorable economic environment to help establish a strong international presence. However, the brokerage is cautious about short-term international performance and anticipates stronger profitability in the medium to long term.

HSBC projects that cost pressures for IndiGo will lessen, with the airline aiming to keep its non-fuel unit costs stable for the fiscal year 2026. Improvements in aircraft availability and healthy capacity growth are expected to aid in achieving this goal.

Following the release of the company’s fourth-quarter results, HSBC has revised its Ebitda forecasts for the financial years 2026 and 2027 upwards by about 2%. It has also increased its net profit predictions by 19% and 18%, respectively, further adjusting the tax rate according to company guidance.

In today’s trading, IndiGo’s stock climbed as much as 1.89% to Rs 5,584 on the NSE. By 11:00 a.m., it was trading at Rs 5,576.5, reflecting an increase of 1.75%. This is compared to a 0.53% rise in the Nifty 50 index.

Currently, 19 out of 23 analysts following IndiGo recommend a ‘buy,’ while two suggest ‘hold’ and two advise ‘sell.’ Bloomberg data shows the 12-month consensus target for the stock is Rs 5,983.77, indicating a potential upside of 7.3%.