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UBS raises InterGlobe Aviation price target to INR 6,450

Published 22/05/2025, 05:16
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INGL
1.48%

On Thursday, UBS analyst Pramod Kumar increased the price target for InterGlobe Aviation Ltd. (INDIGO:IN) to INR 6,450, up from INR 6,000, while reiterating a Buy rating on the stock. The revision follows InterGlobe’s impressive fourth-quarter financial year 2025 (Q4FY25) earnings, where the company’s EBITDA surged by 52% year-over-year to Rs 61 billion. This performance exceeded UBS’s estimates and consensus forecasts by 3% and 15%, respectively.

The airline’s robust quarter was attributed to a boost in demand during the Mahakumbh festival and an extended wedding season. Despite geopolitical tensions affecting demand in May 2025, which led to increased cancellations and a booking slowdown, management is optimistic about a significant recovery in June 2025.

InterGlobe Aviation is also navigating uncertainties, such as the potential discontinuation of its codeshare agreement with Turkish Airlines and the renewal of damp leases with Turkish Airlines and Corendon Airlines. Additionally, the closure of a Pakistan airbase is anticipated to have some cost implications for the airline.

Despite these challenges, the demand for travel within India has been strong, defying a general downtrend in discretionary spending. InterGlobe Aviation is also experiencing cost advantages, with the May 2025 aviation turbine fuel (ATF) prices being approximately 7% lower than the average in the previous quarter. The airline’s operational efficiency is improving as aircraft on ground (AOG) return to service and older damp leases are phased out.

The analyst points to the global aircraft supply constraints and the duopolistic nature of the Indian aviation market as positive factors for pricing power in the medium term. Kumar’s commentary underscores a belief that any pullback in the stock price due to recent geopolitical events could present an attractive buying opportunity for investors.

This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.

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