IndiGo gains 2% as CEO says 'worst is behind us'; Stock up for 6th session

InterGlobe Aviation shares rose on Thursday after CEO Pieter Elbers said to employees that the "worst is behind us," following disruption at airports across the country

IndiGo Share Price: Shares of crisis-hit InterGlobe Aviation Ltd. rose over 2 per cent on Thursday after Chief Executive Officer (CEO) Pieter Elbers said to employees that the "worst is behind us," following widespread flight cancellations and disruption at airports across the country.

 

The airline firm's stock rose as much as 2.72 per cent during the day to ₹5,115 per share, the biggest intraday rise since December 15 this year. The stock pared gains to trade 2.5 per cent higher at ₹5,106 apiece, compared to a 0.25 per cent advance in Nifty 50 as of 12:32 PM. 

 

Shares of the company rose for the sixth straight session and currently trade at 1.7 times the average 30-day trading volume, according to Bloomberg. In the first half of December, the stock fell over 20 per cent amid a disruption in flight services. The counter has risen 12 per cent this year, compared to a 9.2 per cent advance in the benchmark Nifty 50. IndiGo has a total market capitalisation of ₹1.97 trillion. 

IndiGo CEO's message to staff

Elbers said the airline has restored 2,200 flights on Thursday, adding that the last two weeks were "very challenging". In a video message, thanking the IndiGo staff for their efforts, Elbers added that on December 9, he announced that the airline's operations had started stabilising. 

 

He urged the employees to now focus on three things: resilience, root cause analysis, and rebuilding. Elaborating further, he added that the focus of the airline is now to solidify operations and to ensure that the operations are stable as the bad weather and IROPS season begin this week. 

Analysts still cautious on IndiGo

Meanwhile, Geojit Investments reduced its target price for IndiGo to ₹5,830 per share from its previous ₹6,720, while maintaining a ‘Buy’ rating. The brokerage identifies several near-term challenges for IndiGo, including increased regulatory scrutiny, competitive reallocation of flight slots, and difficulties in pilot recruitment.

 

Geojit notes that the Directorate General of Civil Aviation’s (DGCA) 10 per cent flight reduction could diminish IndiGo’s market share as competitors fill the vacated slots, thereby impacting growth and pricing power.

 

The Parliamentary Standing Committee on Transport, Tourism and Culture, led by JD(U) leader Sanjay Jha, has deferred its conclusions, opting to await the Civil Aviation Ministry’s ongoing inquiry report before assigning blame for the widespread operational disruptions. The ministry’s four-member committee is expected to submit its findings by December 28. 

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