InterGlobe Aviation Hit All-Time High On 500-Aircraft Order Deal Worth $50 Bn

InterGlobe Aviation started today's trading session on the BSE at a record-high price of Rs 2499.95 per share, up 2.76% from yesterday's wrap-up. The surge in share price took place the day after InterGlobe Aviation, the operator of IndiGo, placed the largest-ever order for 500 Airbus A320 Family aircraft which includes A320NEO, A321NEO and A321XLR aircraft models.

"IndiGo can maintain operational cost reduction, fuel efficiency, and sustainability goals with the fuel-efficient A320NEO Family aircraft, enabling the fast-growing airline to sustain growth for years to come," Prabhudas Lilladher said in a report.

Currently, IndiGo runs over 300 aircraft, and between now and the end of this decade, it still has 480 aircraft on order that will need to be delivered. With this further solid order for 500 aircraft for the years 2030-2035, over 1.000 aircraft still need to be delivered for IndiGo far into the next ten years.

With this latest order, which was signed on June 19, IndiGo will have placed a staggering total of 1.330 aircraft with Airbus since its founding in 2006.

Pieter Elbers, CEO of IndiGo, said, "It is difficult to overstate the significance of IndiGo's new historic order for 500 Airbus A320 Family aircraft. An orderbook now of almost 1.000 aircraft well into the next decade, enables IndiGo to fulfill its mission to continue to boost economic growth, social cohesion and mobility in India. At IndiGo, we take pride in being India's preferred airline for connectivity in and with India; and by doing so, being one of the leading airlines in the world. This order strongly reaffirms IndiGo's belief in the growth of India, in the A320 Family and in our strategic partnership with Airbus."

Commenting on the outlook of the stock, A R Ramachandran, Co-founder & Trainer-Tips2trades said "Even though Indigo airlines has firmly established itself as the leading airlines in India and is further consolidating it's position through the ordering of the Airbus, the stock price looks bearish on the Daily charts. 2485 is strong resistance on the Daily charts. A daily close below support of 2439 could lead to target of 2300 in the near term."

Nainesh Thakkar, Head of One Percent Academy by Fisdom said "Indigo has already moved 20% up from its previous month's low of ₹2022. The news of the mega Airbus order has already been factored into the stock. On a daily time frame, the stock has a resistance around 2490 - 2485. A crossover above this level should push the stock to 2600+ levels. The immediate stop loss if a long trade is initiated will be 2330. As of now it looks like it will do a sideways consolidation post the 20% up move we saw in the previous month."

Gaurav Bissa, VP, InCred Equities said "Indigo witnessed a symmetrical triangle pattern breakout on the weekly charts at 2150 levels which catapulted the stock towards 2400 levels. After making fresh lifetime high levels the stock triggered a bearish harmonic alt shark pattern on the weekly charts which is a reversal pattern in nature. The pattern suggests a fall to 2150 levels once the stock closes below 2350 levels. So far, the stock is trading above its major swing high levels which is keeping the buying interest intact in the stock with multiyear ascending trendline resistance at 2550 levels. At current prices, the risk reward is not suitable for fresh buying and existing shareholders should book partial profit on account of bearish harmonic pattern."

Milan Sharma, Founder, 35North Ventures said "This is positive for indigo stock and will help the company grow consistently in years to come. In my view, if this deal goes through, the capacity of Indigo will increase by around 50 percent, and I see an upside of 30 -50 percent over three years."

When there is Market (with only a few competitors) and all of sudden you see that one of major stake holder is getting out of the market, these direct benefits of the other stake holder. Airline industry is growing and it will grow more as per the available trends. Considering all these trend Indigo which one of major stake holder in Indian Airline industry, have placed an order of buying 500 new air crafts these aircraft could give new wings to company's growth however it is hefty deal and may increase company's liabilities against assets. On technical aspects today Indigo price has made an all time high at 2490 and now trading at 2445. In May month price has given a very strong breakout of its previous range.

So, most ideal swing support to enjoy this breakout rally is, its low which is nearly 2020-10 and possible targets in futures are 2600/2740/2800/2880/3000 but before these targets we have a major resistance at 2500 price should sustains above this in this month. Once it done, we can see continuation in this upside movements otherwise will be considered as breakout failure at monthly time frame. Keep in mind Fundamental gives us insights about what to trade and technical points given inputs about when to enter in that trade. So, just keep in mind a best buy always has a higher probability of giving you higher returns as compared to high buy. Currently price is trading near to its ATH and from here we can pull back up to 4%-5% if price failed to sustain above 2400 level. So be watchful and keep an eye on it and wait for dip buying, says, V.L.A. Ambala (SEBI Registered Research Analyst), Stock Market Today (SMT).

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