Brokerages bullish on IndiGo despite wider loss in Q2; share price rises 3%

IndiGo share price: IndiGo reported a net loss of ₹2,582.1 crore in Q2FY26 vs a net loss of ₹753.9 crore in Q2FY25.

IndiGo share price today: Share price of InterGlobe Aviation-run IndiGo rose over 3 per cent on the BSE on Thursday even as the budget airline’s net loss, unexpectedly, widened in the September quarter of the current financial year (Q2FY26).

 

The IndiGo stock climbed 3.4 per cent to hit a high of ₹5,830 per share on the BSE in the intraday trade, and was up 3.15 per cent at 9:32 AM. By comparison, the BSE Sensex index was trading 0.4 per cent higher.

 

The rise in IndiGo shares today came after most brokerages maintained their long-term positive outlook on the airline, acknowledging the airline’s Q2 net loss to be driven by higher-than-expected forex hit.

 

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IndiGo Q2 results highlights:

• IndiGo reported a net loss of ₹2,582.1 crore in Q2FY26 vs a net loss of ₹753.9 crore in Q2FY25. 
• Excluding the impact of currency depreciation, IndiGo’s net profit stood at ₹103.9 crore.  
• Operationally, IndiGo reported a total revenue of ₹19,599.5 crore, up 10 per cent year-on-year (Y-o-Y). Of this, revenue from operations increased by 9.3 per cent to ₹18,555.3 crore.  
• Ebitdar, excluding forex impact, came at ₹3,800.3 crore with a margin of 20.5 per cent. By comparison, Ebitdar, excluding forex impact, was ₹2,666.8 crore (15.7 per cent margin) last year. 
• Including forex hit, Ebitdar stood at ₹1,114.3 crore (6 per cent margin) vs ₹2,434 crore (14.3 per cent margin) Y-o-Y. 
• IndiGo's capacity increased by 7.8 per cent to 41.2 billion; passengers increased by 3.6 per cent to 28.8 million; yield increased by 3.2 per cent to ₹4.69; passenger load factor (PLF) was flat at 82.5 per cent.  
• IndiGo reported a total cash balance of ₹5,3515.2 crore at the end of Q2FY26, comprising ₹3,8516.7 crore of free cash and ₹14,998.5 crore of restricted cash. 
• The capitalised operating lease liability was ₹49,651.4 crore with the total debt (including the capitalised operating lease liability) at ₹74,813.8 crore.

IndiGo capacity guidance

The company guided for high-teens capacity growth in H2FY26 and thus, raised FY26 capacity growth guidance to mid-teens from low double-digits.  ALSO READ | Britannia Ind shares gain 5% after Q2 results; revenue misses estimates

IndiGo share price outlook: Brokerages view

Elara Capital | Maintain 'Buy' | Share price target: Raised to ₹7,241

IndiGo's operating earnings or Ebitda improved 85 per cent Y-o-Y due to a 4 per cent growth in passenger volume and a drop in fuel cost. CASK (cost per available seat kilometer) rose 9 per cent Y-o-Y, driven by a jump in non-fuel CASK by 25 per cent. RASK (revenue per available seat kilometer) was up 2 per cent Y-o-Y due to a 3 per cent rise in passenger yield (passenger revenue seat-km). 

 

Based on H1FY26 earnings trend and raised capacity growth guidance for H2FY26, the brokerage has raised FY26, FY27, and FY28 adjusted EPS estimates (excluding forex loss) by 10 per cent, 4 per cent, and 4 per cent, respectively. It expects 14 per cent adjusted PAT CAGR in FY25-28.

Motilal Oswal Financial Services | Maintains 'Buy' | Maintains target price: ₹7,300

IndiGo’s planned capacity expansion is focused more towards international markets to provide geographical diversification against foreign exchange losses. Thus, despite the near-term challenges in the form of rupee depreciation and rising damp leases, the airline remains confident in its growth strategy.

 

The brokerage has cut its FY26 earnings estimates by 23 per cent (due to forex losses), while largely retaining their FY27/FY28 estimates. It values the stock at 11x FY27E Ebitdar. 

Emkay Global Financial Services | Maintain 'Buy' | Raised target price: ₹6,800

Emkay Globa noted that IndiGo’s 4 per cent Y-o-Y pax growth outperformed that of the stagnant industry, strengthening its market leadership. 

 

CASK (excl fuel/forex) rose due to rupee depreciation, with ~nearly 60 per cent of IndiGo’s cost being US Dollar denominated. The airline’s net forex exposure was ₹900 crore for every ₹1 movement in forex. 

 

Entering the seasonally stronger Q3, the airline has ramped up capacity to tap into peak festive demand, operating over 2,300 daily flights on several days in October, with capacity expansion focused on international routes. Aircraft on ground (AOGs) stayed in the 40s and are expected to remain so through FY26-end, leading to increased damp leases, the management said.

 

The brokerage has raised FY26-28 revenue estimates by 3 per cent each, while keeping the Ebitda largely unchanged, building in higher CASK. 

 

Its FY26-27E Adjusted-EPS estimate has been cut by 5-6 per cent each, factoring in higher depreciation and finance cost and lower other income.