Jefferies views IndiGo as unique and strong franchise, raises target price to Rs 5,260
InterGlobe Aviation, the parent company of IndiGo, increasing the stock’s target price to Rs 5,260 from the previous target of Rs 5,100, describing the airline as a ‘unique, strong franchise’.
Jefferies has mainly focussed on IndiGo’s strong market position and the anticipation of positive developments despite recent challenges.
IndiGo holds a dominant market share of over 60% in the domestic air travel sector in India.
The stock has recently underperformed, following a significant miss in the company's second-quarter (2Q) results. This underperformance was attributed to higher costs, which impacted profitability during that period.
The foreign brokerage firm, however, expects cost normalization in the future. This suggests that the factors contributing to the higher costs in 2Q are considered temporary, and Jefferies anticipates a return to more typical cost levels.
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