IndiGo Shares Jump 3.13% After Elara Capital Upgrades Rating to 'Buy'

Shares of IndiGo, operated by InterGlobe Aviation, jumped 3.13% on Monday, December 23, 2024, reaching an intraday high of ₹4,486.95 per share.

InterGlobe Aviation, which operates IndiGo, saw its shares rise by 3.13% on Monday, December 23, 2024, reaching an intraday high of ₹4,486.95 per share. At 11:15 AM IST, the stock was trading 2.97% higher at ₹4,480, outperforming the broader market as the BSE Sensex rose by 1.01% to 78,828.40.

This strong performance by IndiGo shares came after Elara Capital upgraded its rating on the stock to ‘Buy’ from ‘Sell’ earlier this month. The brokerage also raised its target price for the stock to ₹5,309 from ₹3,847, indicating an upside of 21% from the current level.

In its note, Elara highlighted several key factors that contributed to its positive outlook for IndiGo. These included:

- Strong market share gains, particularly in international traffic.

- Fleet expansion and capacity addition, which is expected to outpace competitors.

- Anticipated improvement in ancillary revenues per available seat kilometer (ASKM) as IndiGo focuses on increasing non-ticket revenue streams.

However, the brokerage also noted some potential risks to IndiGo's performance, such as a significant increase in crude oil prices (above $90/bbl) and delays in the return of the airline's grounded fleet.

Elara's earnings per share (EPS) estimates for IndiGo were also revised upwards for FY25E, FY26E, and FY27E, reflecting optimism about the airline's future growth trajectory. With IndiGo expected to continue expanding its market share and outperforming competitors in the coming years, the brokerage maintained its positive stance on the stock.