HSBC Global Research has raised its target price on InterGlobe Aviation Ltd., the parent company of IndiGo, to Rs 6,650 from Rs 5,975 previously, implying an upside of 21.3%. The brokerage has maintained its buy rating, noting that IndiGo’s “healthy strategy” could help it grab the winner’s crown.
HSBC said IndiGo’s plausible network strategy, focused on expanding domestic routes beyond the competitive top-tier markets, is paying off. The airline has reduced its reliance on key but cut-throat routes, with the top 15 domestic routes now accounting for just 20% of its capacity, compared to 30% in 2019. At the same time, IndiGo has cemented a near-monopoly on 66% of its domestic capacity, holding more than a 60% share on those routes, up from 53% in 2022.
The brokerage said demand has almost fully recovered after a temporary lull in April and May, driven by geopolitical tensions. Fares on some routes remain soft, but the overall trading outlook is solid, thanks to tight capacity in the market.
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