The shares of IndiGo-parent InterGlobe Aviation have declined around 8% in a month as fresh escalations in the Middle East conflict pushed oil prices beyond $100 per barrel. Ambit Institutional Equities warns that the aviation sector's near-term share price upside remains capped but the brokerage’s structural conviction remains unchanged given cost-led market leadership.
In its latest report, Ambit Institutional Equities said India’s aviation landscape showed divergent trends, with IndiGo leading while other incumbents lagged. Air India posted its largest-ever net loss of over Rs 22,000 crore in FY26, forcing capacity cuts of 22-27%. While SpiceJet’s fleet contracted to 21-25 aircraft given persistent liquidity constraints, Akasa continued expanding off a small base with an industry-best load factor, the brokerage said.
It noted that IndiGo gained three points in domestic and international market share since June 2025, backed by an order book of over 900 aircraft in a supply-constrained environment at Boeing and Airbus. While Ambit expects traffic to remain soft in the near term (domestic and international declined in August 2026), it is expecting 14% and 37% revenue and EBITDA CAGR respectively in FY26-29.
Also read | IndiGo to offer lie-flat business class, dense economy on long-haul routes
Tight aircraft supply, competitor transformation and rising domestic market share create a strong long-term growth outlook for the airline, despite short-term fuel and forex-driven losses, Ambit said as it believes that IndiGo will gain as others lose ground. It maintained its ‘Buy’ call on the stock with a target price of Rs 5,300 apiece, implying 6.5% upside potential from the stock’s previous closing price of Rs 4,975 apiece.
What are the key risks that can cap IndiGo stock’s upmove?
However, Ambit listed out key risks to its bullish view on IndiGo. Prolonged elevated air turbine fuel or further rupee depreciation impacting earnings, and an extended Middle East conflict continuing to disrupt West Asia routings and cost structures industry-wide, were among the risks.
A faster-than-expected Air India stabilisation and new CEO Tewolde Gebremariam's long-haul network-building track record from Ethiopian Airlines which would impact market share, along with possible Airbus delivery delays constraining IndiGo's own fleet growth, as well as a well-capitalised new entrant entering the airline sector-either fresh or via stake acquisition, with explicit government encouragement to break the IndiGo–Air India duopoly following IndiGo's own operational crisis last year were among others risks.
Also read | IndiGo to start direct Guwahati-Bangkok flights from October 27
IndiGo share price
IndiGo shares have overall fallen a little over 1% in a week and nearly 8% in one month. The stock has overall fallen nearly 4% in 2026 so far, and more than 12% in one year.
In the longer term, IndiGo shares have delivered 99% returns over three years and 158% in five years. The company has a market capitalisation of nearly Rs 1.91 lakh crore.
This article has been written by Debaroti Adhikary, who is not a SEBI-registered Research Analyst or an Investment Adviser. Debaroti Adhikary and his/her ‘relative(s)’ (as defined under Section 2(77) of the Companies Act, 2013) do not hold any financial interest in the companies mentioned in this article as of the date of publication. The views/recommendations mentioned in this article, wherever applicable, are those of the respective SEBI-registered Research Analyst/brokerage and have been reproduced/reported with due attribution. They should not be construed as the views or recommendations of The Economic Times Digital or the journalist. Readers are advised to consider the original research report and make their investment decisions based on their own assessment. Brokerage disclaimers here.
