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Investing.com - JPMorgan has downgraded InterGlobe Aviation Ltd. (INDIGO:IN) from Overweight to Neutral, while reducing its price target to INR5,535.00 from INR5,835.00.
The downgrade comes as JPMorgan sees a slowing domestic demand environment and continued yield pressure for the Indian airline. The firm noted that InterGlobe’s second-quarter available seat kilometer (ASK) growth guidance of mid-to-high single digits, compared to 16% in the first quarter, supports this cautious view.
InterGlobe’s first-quarter fiscal 2026 results missed both JPMorgan and street expectations, with profit after tax reaching Rs 21.6 billion, representing a 21% year-over-year decline. Despite favorable oil prices, the 5% year-over-year decline in yields came as a negative surprise to analysts.
JPMorgan has cut its fiscal 2026-2028 earnings per share estimates for InterGlobe by 5-10%, driven by reductions in ASK and revenue per available seat kilometer (RASK) to cost per available seat kilometer (CASK) spreads.
While the investment bank acknowledges that InterGlobe remains a long-term beneficiary of air traffic growth in India, it believes the current valuation at 26 times fiscal 2027 estimated price-to-earnings ratio leaves limited room for upside potential.
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