IndiGo gains 2%, airline stock price nears 3-month high; here's why

IndiGo stock is up 9% from September low. The company's management said it will be able to grow by high teens in both Q3 and Q4 of the current financial year as compared to the same period last year.

Don't want to miss the best from Business Standard?

IndiGo share price today

 

The share price of InterGlobe Aviation-run IndiGo hit an over two-month high of ₹5,970, gaining 2 per cent on the National Stock Exchange (NSE) in Monday’s intra-day trade. The stock was quoting higher for the fourth straight trading day, surging 4 per cent during the period.

 

The stock price of the airline company also quoted at its highest level since August 26, 2025. It has bounced back 9 per cent from the September-month low of ₹5,501 on the NSE. It had hit a 52-week high of ₹6,232.50 on August 18, 2025.

 

Thus far in the calendar year 2025, IndiGo has outperformed the market by soaring 28 per cent, as compared to a 9 per cent rise in the BSE Sensex.

 

IndiGo allocates $820 million towards purchase of aviation assets

 

IndiGo has approved a capital investment of $820 million (~₹7,294 crore) in its wholly-owned subsidiary, InterGlobe Aviation Financial Services IFSC Private Limited (IndiGo IFSC). 

 

The Investment will be made through a combination of equity shares and 0.01 per cent Non-Cumulative Optionally Convertible Redeemable Preference Shares (OCRPS), in one or more tranches. The funds raised by IndiGo IFSC shall be primarily deployed towards acquisition of aviation assets, thereby enabling ownership of the aircraft.

 

IndiGo's Q2 results, outlook

 

In the July to September 2025 quarter (Q2FY26), IndiGo delivered strong operational results driven by disciplined capacity deployment, supported by stronger revenue environment and lower fuel prices.

 

In terms of profitability excluding the impact of foreign exchange movement and hedging, the company reported a profit of ₹104 crore as against a loss of ₹750 crore, during the same period last year.

 

Including the impact of foreign exchange movement, IndiGo reported a loss of around ₹2,580 crore during the quarter. This was the consequence of currency movement pertaining to dollar-based future obligations during the quarter. The uncertainties around global policy related matters led to a significant rupee depreciation during Q2, the company said.

 

As the company moves to the seasonally strong second-half of the financial year, based on the market opportunity and addition of long-haul, the management announced that the company will be able to grow by high teens for both the third and fourth quarter of the current financial year as compared to the same period last year. This will translate to a slightly upward revision to early teens capacity growth for the full financial year 2026 as compared to the company’s earlier guidance of early double digit growth.

 

Motilal Oswal Financial Services view on IndiGo

 

Due to higher-than-expected currency depreciation, slower reduction in aircraft on the ground, and additional damp leases, the company expects an early single-digit increase in unit cost (ex-fuel and forex) in FY26 vs. FY25. However, the management remains confident about a healthy international as well as domestic demand outlook, backed by an under-penetrated aviation market with a favourable long-term demand, believe analysts at Motilal Oswal Financial Services.

 

Hence, looking at the long-term tailwinds, the company has upgraded its FY26 capacity growth guidance to mid-teens from double digits. Further, the capacity expansion is focused more internationally to provide geographical diversification against foreign exchange losses. 

 

The brokerage firm cut FY26 earnings estimates by 23 per cent (due to forex losses); while largely retained FY27/ FY28 estimates. Analysts value the stock at 11x FY27E EBITDAR to arrive at target price of ₹7,300 and reiterated a 'BUY' rating on IndiGo.