Target @₹7,000: IndiGo set to fly higher as Anand Rathi initiates with Buy

Anand Rathi believes IndiGo's disciplined low-cost structure, commanding market share, and strategic global expansion make it a long-term compounding story in Indian aviation.

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

Domestic brokerage Anand Rathi has initiated coverage on InterGlobe Aviation Ltd (IndiGo) stock with a ‘Buy’ rating and a 12-month target price of ₹7,000, valuing the stock at 10x September’27E Ebitda.

 

The brokerage believes IndiGo’s disciplined low-cost structure, commanding market share, and strategic global expansion make it a long-term compounding story in Indian aviation.

 

“We believe IndiGo to be a long-term compounding story supported by disciplined low-cost model, India market dominance, strategic expansion, healthy balance sheet and robust long-term growth prospects. Hence, we initiate coverage with a ‘Buy’ rating, at a 12-month TP of ₹7,000, valuing at 10x Sep’27e Ebitda,” said Shobit Singhal, research analyst and Sagarika Chetty, research associate at Anand Rathi, in a note dated October 27, 2025.

 

Despite a weak first half of FY26, analysts at Anand Rathi expect a strong rebound in the second half, driven by festive travel, higher discretionary spending following GST rate cuts, and resilient air travel demand. 

 

“We see IndiGo as a rare play combining market leadership, operational discipline, and balance sheet strength – poised to soar higher in both domestic and international skies,” the brokerage said.  ALSO READ | Bata India shares tumble 6% as Q2 earnings miss street's estimates 

IndiGo has firmly cemented its dominance in India’s aviation market with a ~64.4 per cent domestic share, backed by a fleet of 416 aircraft and an impressive order book of 910 planes. 

 

This scale, Anand Rathi noted, puts the airline far ahead of peers – Air India Group (313 aircraft), Akasa (30), and SpiceJet (56). The brokerage believes IndiGo has effectively reshaped India’s aviation landscape into a near-monopoly structure, outperforming competitors through a superior cost-efficient model, consistent fleet expansion, and resilient operations despite global supply chain challenges.

 

Moving forward, IndiGo aims to leverage India’s rapidly expanding air travel market, which Anand Rathi expects to grow at ~16.4 per cent compound annual growth rate (CAGR) over the next five years, reaching about 510 million passengers. With new airport additions and routes to emerging destinations, IndiGo is well-positioned to capture incremental demand. The airline’s management plans to lift its international capacity share to ~40 per cent by FY30, up from the current 30 per cent, further strengthening its global footprint.  ALSO READ | KFin Technologies shares gain 4% on Q2 results; check key details here 

Thus, Anand Rathi analysts project IndiGo’s revenue CAGR at 16.2 per cent over FY26-28, supported by a 10.6 per cent annual fleet growth and stable Ebitda margins of 25-26 per cent, aided by easing fuel and rental costs.

 

Key risks, the brokerage cautions, include aircraft delivery delays, fuel price volatility, and currency weakness. But overall, analysts at Anand Rathi see IndiGo’s fundamentals 'ready for takeoff' in the next phase of India’s aviation boom.