IndiGo shares gain as airline reports profit in Q4. What should investors do now?

Interglobe Aviation’s shares gained on Friday after the company reported profit for the January-March quarter against a loss in the corresponding quarter in the year ago period.

Following the Q4 show, Credit Suisse maintained an ‘Outperform’ rating on the counter while other top brokerages have a ‘Buy’ stance.

The company which operates its airline under the IndiGo brand posted a consolidated net profit of Rs 919 crore for the January-March period on Thursday as against a loss of Rs 1,682 crore in Q4FY23. On a sequential basis, profit fell 35% from Rs 1,423 crore in the preceding December quarter.

The stock was trading at Rs 2,269 on the NSE at 12:50 pm and was up by 4.35 or 0.19% from Thursday’s closing price. The stock intraday gains are 1.6%.

Here’s what brokerages are saying about the stock:

Goldman Sachs: Buy | Target: Rs 2,600
Goldman Sachs recommends a ‘Buy’ on IndiGo, estimating strength in the near term setup. The brokerage has raised FY24/FY25 EPS by 15%/10%.

Investec: Buy | Target: Rs 2,850
IndiGo had a good end to FY23 with a stronger outlook ahead. Investec has raised earnings estimates by 12/14% for FY 2024-25. It said that the industry is moving towards an attractive duopoly.Credit Suisse: Outperform | Target: Rs 2,450
Credit Suisse maintains an ‘Outperform’ rating on the stock with a price target of Rs 2,450. Muted overall yield impact of GoFirst bankruptcy may be long-term positive for the airline company. The overall grounding situation remains unchanged. Falling ATF process may make for sustainable growth and spreads.

Emkay: Buy | Target: Rs 2,700
We value IndiGo using the DCF method with a target price of Rs 2,700 (18.4X Mar-25E target PE). Key risks: Adverse currency/fuel prices, recession and severe operational issues. IndiGo intends on upping capacity by 15% in FY24 and doubling its fleet by 500 aircraft by FY30. Further, replacement of CEOs with NEOs shall lift yields.

Nuvama: Buy | Target: 2,703
We adjust our FY24E/FY25E EBITDA by -4%/6% and raise our target price by 8% to Rs 2,703. And maintain ‘BUY’. Indigo reported Q4FY23 EBITDAR of Rs 3,000 crore (13% above consensus) versus Rs 200 crore YoY/Rs 3,400 QoQ.

(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of Economic Times)

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