IndiGo's market capitalisation hits Rs 2 trillion; rallies 25% from Feb low

IndiGo share price has rallied 10 per cent so far in the current week, including the 2 per cent gain in the stock price today

InterGlobe Aviation, which operates the IndiGo airline, has joined an elite club of companies having a market capitalisation (market cap) of Rs 2 trillion, after the stock hit a new high of Rs 5,190.30 on the National Stock Exchange (NSE) in Thursday’s intra-day trade. IndiGo’s market cap crossed the Rs 2 trillion-mark (Rs 200,567 crore) for the first time today, exchange data shows.

 

At 10:16 AM; IndiGo was quoting 2 per cent higher at Rs 5,084.65, with a market cap of Rs 1.96 trillion (Rs 196,483 crore). 

 

With today’s gain, thus far in the current week, the airline stock has gained 10 per cent. It has rallied 25 per cent from its previous month low of Rs 4,157.85 touched on February 17, in intra-day trade. On Tuesday, the stock had surpassed its previous high of Rs 5,033.20 touched on September 12, 2024.

 

 

IndiGo is one of the most efficient low cost air carriers (LCCs) with a market share of 62 per cent in the Indian aviation sector. IndiGo leads the industry with its best-in-class operational metrics, including on-time performance, high aircraft utilisation, and cost efficiencies. Its fuel-efficient fleet and streamlined network optimisation ensures profitability even in challenging market conditions.

 

IndiGo aims to increase its international capacity share to 40 per cent by FY30, expanding beyond its traditionally strong domestic network. It is targeting underserved international routes through long-range aircraft and codeshare partnerships, positioning itself as a preferred airline for international travelers.  Read: Hyundai Motor India share rises over 2% on hiking vehicle price by up to 3%

 

The Indian aviation industry is witnessing a rapid expansion, with domestic air travel set to double by calendar year 2023. This growth will be driven by a rising middle class, increasing disposable incomes, and government-led infrastructure projects. IndiGo, as the market leader, is well positioned to capitalise on this trend by expanding its fleet and network.

 

Meanwhile, India’s domestic passenger air traffic rose 11 per cent year-on-year (YoY) to 14.6 million in January 2025, while daily trends in February 2025 suggest a further acceleration in traffic growth to ~17 per cent YoY. Indigo’s market share maintained its upward trend, increasing by 80 bps month-on-month (MoM) to reach a record high of 65.2 per cent in January 2025, further strengthening its dominance in the domestic space, said analysts at Emkay Global Financial Services in the sector update.

 

The brokerage firm expects aviation turbine fuel (ATF) prices to remain largely steady in March 2025, with minimal MoM variation, as the ~4 per cent MoM decline in crude oil prices is largely offset by an ~18 per cent MoM uptick in jet fuel spreads, and depreciation of the rupee, the brokerage firm said.

 

IndiGo is striving to improve its international presence through strategic partnerships and loyalty programs. It served 106.7 million customers in FY24, with a net increase of 63 aircraft. The company had eight strategic partners with a 27 per cent international share in terms of available seat per kilometer (ASK) in FY24, Motilal Oswal Financial Services said in a company update.

 

The company's management has also taken several preemptive measures to increase its global brand awareness as it expects to capture a bigger share of growth in the international market over the coming years. IndiGo is further enhancing its international travel and working relentlessly to adjust schedules to reassure customers, the brokerage firm said. However, it reiterated the 'Neutral' rating on the stock with a target price of Rs 4,660, based on 8x FY27E EV (enterprise value)/EBITDAR (earnings before interest, taxes, depreciation, amortisation, and rent/leases).