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Shares of IndiGo, operated by InterGlobe Aviation, saw a significant boost on Monday; Know why
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IndiGo Share Price Surge: Shares of IndiGo, operated by InterGlobe Aviation, saw a significant boost on Monday, December 23, 2024, rising by up to 3.13%, reaching an intraday high of Rs 4,486.95 per share.
By 11:15 AM, the stock was trading 2.97% higher at Rs 4,480 per share, outperforming the broader market. The BSE Sensex was up 1.01% at 78,828.40 during the same time.
The surge in IndiGo’s stock price followed a positive rating upgrade by domestic brokerage Elara Capital, which raised its recommendation from ‘Sell’ to ‘Buy’. The target price was also increased from Rs 3,847 to Rs 5,309, suggesting a potential upside of 21%.
In addition to the upgrade, Elara Capital boosted its target price for InterGlobe Aviation by a notable 38%, reflecting confidence in the company’s future prospects. The revised target implies a potential upside of 21% from the previous Friday’s closing price. Elara’s outlook is based on anticipated improvements in demand, which led the brokerage to raise its FY25-27 earnings-per-share projections by 2-27%.
Elara also sees strong growth potential driven by the addition of new airports and terminal upgrades, which should help support a 12% compound annual growth rate (CAGR) in demand over FY25-28. Furthermore, the return of the P&W aircraft to IndiGo’s fleet is expected to give the airline a competitive advantage, particularly as rivals face challenges in expanding capacity.
Elara analysts also expect Indian airlines, including IndiGo, to continue growing in international traffic and capitalize on a shift from long-haul train travel to air travel, which is projected to double aviation traffic in the country.
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