IndiGo: This aviation stock surged nearly 80% in 8 months. Is it still a ‘buy’

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₹2,381 apiece to the current trading price of ₹4,271, translating into a gain of 79.37%. In the previous trading session, the stock crossed the ₹4,500 mark for the first time to hit a new record high of ₹4,529 apiece.

Going forward, the stock may not extend its upward journey, according to projections made by InCred Equities.The brokerage in its latest report has retained its 'reduce' rating on InterGlobe Aviation, pointing out that while the airline has benefited from strong tariffs, these gains are being largely offset by high operating costs.The brokerage highlighted concerns about rising salary expenses and increased costs associated with airport operations, which are putting pressure on the airline's profitability. Despite the robust revenue growth driven by higher fares, the elevated cost structure remains a significant challenge, leading InCred Equities to maintain a cautious stance on the stock.It, however, has raised the target price on the stock to ₹2,400 apiece from ₹2,000 earlier.

Nevertheless, the target price signals a 43.60% downside for the stock from its latest closing price.Also Read: General Elections 2024: How different poll outcome scenarios may impact equity, forex and bond marketsIndiGo reported a net profit of ₹30 billion for 4QFY24, marking a 107% year-on-year increase but a 37% quarter-on-quarter decrease. The airline booked claims from Pratt & Whitney (exact amount undisclosed) in its revenue for 3Q and 4QFY24.

Ancillary revenue increased by ₹1.7 billion compared to 2QFY24, and other operating income rose by ₹1.8 billion despite a 1.5% reduction in available seat kilometers (ASK). The brokerage estimates the claims booked in 4Q and 3Q FY24 at ₹3.5 billion and ₹4.2 billion, respectively.It said