IndiGo Share Price Falls 12% In One Month After Flight Fiasco, Buy the Dip or Bail Out? Check Target Price

IndiGo Share Price Today: Shares of InterGlobe Aviation have fallen nearly 12% over the past month after the budget carrier faced widespread flight cancellations earlier this month. Although the airline has assured investors that the worst phase is now behind it, the stock continues to trade in bearish territory.

IndiGo share price has declined nearly 12% over the past month, despite showing some recovery in the last few trading sessions. IndiGo shares were trading marginally higher by 0.06% at Rs 5,152 per share on the BSE, with a market capitalisation of Rs 1,99,480.75 crore at 10:53 am.

IndiGo Share Price Recommendation

The recent decline in IndiGo share price is due to a short-term disruption, however, the stock continue to provide a long-term opportunity to its shareholders as it is the key beneficiary of global aviation growth in India, noted Motilal Oswal in its report released on Monday, December 22.

The brokerage has given a 'Buy' rating to IndiGo with a target price of Rs 6,300 per share, indicating nearly 22% upside in long-run. "We reiterate BUY with a TP of INR6,300, valuing it at 9x FY28E EBITDA (implied P/E on FY28E is 26x). We have rolled over our target to FY28 and reduced our EV/EBITDA multiple to 9x from 11x on FY27E," noted the brokerage in its report.

The brokerage revised its estimates for IndiGo's growth prospects due to the widespread flight cancellations due to operational challenges in December. However, it continues to stay bullish on IndiGo's long-term growth story.

"Nonetheless, we believe INDIGO's long-term structural thesis remains intact. Its scale advantages, improving on-time performance, and disciplined pricing strategy should enable the airline to sustain market leadership and remain a core beneficiary of India's travel and tourism boom," added MOFL in its report.

IndiGo To Offer Flight Vouchers To Passengers Affected By Flight Cancellation

IndiGo has announced that it will start offering flight vouchers to passengers affected by flight cancellation earlier in the month. The flight vouchers will be offered in addition to the mandatory compensation the carrier is entitled to pay as per the DGCA guidelines.

Multiple IndiGo flights were cancelled in December after the company failed to implement the new Flight Duty Time Limitation (FDTL) norms implemented by the Direcotrate General of Civil Aviation (DGCA). The crew shortage and operational challenges led to a massive chaos at the airport, multiple flight cancellations and delays.

Disclaimer: The views and recommendations expressed are solely those of the individual analysts or entities and do not reflect the views of Goodreturns.in or Greynium Information Technologies Private Limited (together referred as "we"). We do not guarantee, endorse or take responsibility for the accuracy, completeness or reliability of any content, nor do we provide any investment advice or solicit the purchase or sale of securities. All information is provided for informational and educational purposes only and should be independently verified from licensed financial advisors before making any investment decisions.