Motilal Oswal upgrades Indigo stock rating to 'BUY', projecting a 27% upside. Target price of ₹6,550, anticipating growth in the aviation sector.
Stock to buy: Motilal Oswal has upgraded its rating for InterGlobe Aviation (Indigo), a leading aviation sector stock, recommending a 'BUY'. The brokerage firm has set a target price of ₹6,550 for Indigo, anticipating a 27% upside in the stock. This report highlights the strength of India's aviation sector, increasing domestic travel, and a growing middle-class population as contributing factors to Indigo's positive prospects.
Indigo Stock: 'BUY' rating and ₹6,550 target price
Motilal Oswal suggests that the recent decline in Brent crude prices and the rising demand for domestic travel could benefit Indigo. Furthermore, the company is viewed as well-positioned to capitalize on the growth in the aviation sector. Considering the projected doubling of domestic passenger traffic by 2030, Indigo is likely to aggressively expand its services and routes to leverage this opportunity.
The brokerage believes that Indigo's stock is trading at a valuation of 20x FY26E EPS ₹257.9 and 10x FY26E EV/EBITDAR. Given the company's b operational performance and positive global factors, Motilal Oswal presents it as an attractive investment option.
Indigo stock's recent performance and future projections
Indigo's stock has risen by 11.70% in the last month and delivered a 46% return in a year. Furthermore, the stock has seen a growth of 179% in two years and 419% in five years. The company's market cap is ₹2,02,872 crore. The airline is expanding its fleet and will have 437 aircraft by the end of 2024.
Indigo's operational strength and future strategies
According to Cirium data, Indigo operates 15,768 flights per week, a 12.7 percent increase compared to April last year. Indigo plans to increase its fleet to 437 aircraft by the end of 2024, further enhancing its capacity.
The brokerage firm's report also states that Indigo is likely to see strength in both the domestic and global markets, particularly given the positive outlook for the Indian aviation sector. According to Motilal Oswal, the target price for this stock is ₹6,550, which could offer investors a good return.
