IndiGo stock up 2% despite Q1 profit dip; what's fueling (- investor optimism?

Shares of InterGlobe Aviation, the parent company of IndiGo, were surging higher in an otherwise weak market on Thursday, July 31. The company’s shares rose 1.89 per cent to hit an intra-day high of ₹5,849 per share on the NSE, despite reporting a loss in its results for the first quarter of the financial year 2024–25.

 

The upward movement in the company’s share price followed brokerage firms Motilal Oswal Financial Services, and Elara Capital reaffirming their ‘Buy’ ratings on the stock.

 

As of 11:34 AM on Thursday, IndiGo shares were trading at ₹5,824 per share, up 1.46 per cent from their previous close of ₹5,740. In contrast, the benchmark NSE Nifty was trading 48.20 points or 0.19 per cent higher at 24,806.  Track Stock Market LIVE Updates

IndiGo Q1FY26 results

During the quarter under review, InterGlobe Aviation reported a 20.25 per cent year-on-year (Y-o-Y) decline in consolidated net profit to ₹2,176.3 crore, down from ₹2,728.8 crore reported in Q1FY25.

 

The company’s revenue from operations stood at ₹20,496.3 crore in Q1FY26, up 4.73 per cent Y-o-Y from ₹19,570.7 crore. On the flip side, total expenses in Q1FY26 rose 10.2 per cent Y-o-Y to ₹19,231.9 crore, up from ₹17,444.9 crore.

 

IndiGo reported earnings before interest, taxes, depreciation, amortisation, and restructuring or rent costs (Ebitdar) of ₹5,738.6 crore, with a margin of 28 per cent, compared to ₹5,811.1 crore and a 29.7 per cent margin in Q1FY25.

 

During the quarter, the company’s capacity increased by 16.4 per cent to 42.3 billion available seat kilometres (ASKs). The number of passengers carried rose 11.6 per cent to 31.0 million. However, the company saw a 5.0 per cent decline in yield to ₹4.98, and the load factor dropped 2.1 percentage points to 84.6 per cent.  Check List of Q1 results today

Management commentary

The June quarter, Pieter Elbers, CEO, IndiGo, said was shaped by significant external challenges that created headwinds for the entire aviation sector. 

 “Despite these industry-wide disruptions, we reported a net profit of ₹2,176.3 crore with a net profit margin of around 11 per cent for the quarter ended June 2025. While the revenue environment saw moderation, demand for air travel remained strong as we served more than 31 million passengers during the quarter, reflecting a Y-o-Y growth of around 12 per cent,” Elbers noted.

 

Looking ahead, he added: “We remain optimistic about the growth of air travel. With our scale, network, and fit-for-purpose fleet, we remain committed to serving the growing demand.”

Brokerage on IndiGo shares

Motilal Oswal Financial Services – Reiterate Buy, Target Price: ₹6,900

Analysts at Motilal Oswal reaffirmed their Buy rating on IndiGo shares, citing the company’s resilience amid geopolitical disruptions and operational headwinds. The firm highlighted IndiGo's effective cost control, strong network execution, and consistent passenger growth.

 

They expect stabilising fuel costs, the return of grounded aircraft to service, and improved demand to drive performance in upcoming quarters.

 

“Backed by early double-digit capacity growth, stable yields, a rising international mix (currently 30 per cent of ASKs), and improving operating leverage from reduced damp leases and expanding wide-body routes, IndiGo is well-positioned to sustain healthy profitability,” wrote the analysts in report.

 

They added, “We broadly retain our earnings estimates and expect revenue / Ebitdar/ Adjusted PAT to clock a CAGR of 9 per cent / 13 per cent / 18 per cent over FY25–27. We value the stock at 11x FY27E Ebitdar to arrive at our target price of ₹6,900. Reiterate Buy.”

Elara Capital – Retain Buy, Target Price: ₹6,878

Analysts at Elara Capital also reiterated their Buy rating on IndiGo, driven by expectations of a weak crude oil price environment, stable aircraft deliveries from Airbus, airport capacity expansion, and the return of Pratt & Whitney (P&W) engines to service — while competitors face capacity constraints.

 

They remain positive on the aviation sector, citing the anticipated launch of new airports in Delhi and Mumbai by Q2FY26, and a projected dip in oil prices to below $70 per barrel.

 

Analyst noted that “IndiGo's P&W engine-fitted fleet is already beginning to return to service, helping control non-fuel costs.”

 

They raised the target price to ₹6,878 (from ₹6,531), based on FY27E EV/Ebitda, assuming a forward EV/Ebitda multiple of 10.5x (up from 10.0x). However, they cut FY26E EPS by 7 per cent due to lower-than-expected Q1 PAT.

 

“Key risks to our call are a jump in crude oil prices to above $ 90/bbl and higher capacity addition by competitor airlines,” said the analysts. 

About IndiGo

InterGlobe Aviation Limited, operating as IndiGo, is India’s leading low-cost airline, offering air transportation services, including both passenger and cargo. Founded in 2006 by Rahul Bhatia and Rakesh Gangwal, IndiGo operates primarily in the domestic air travel market.

 

With over 1,800 daily flights, IndiGo serves 78 domestic and 26 international destinations. As of July 31, the company’s market capitalisation stood at ₹2,25,110.34 crore on the NSE.