Morgan Stanley raised the target price for IndiGo shares to ₹5,142, implying that it is looking at a potential upside of more than 16% from the May 23 closing price. The brokerage, which has an overweight position on the company, believes that the company is ready to evolve in the coming years, with loyalty programs, business class and long-haul international planned.
He stressed that the change could involve cost pressures in the short term, but that the company had the right strategy because the consumer is also changing. At the same time, he expects inflationary pressures to increase.
Morgan Stanley noted that the company’s fourth-quarter earnings before interest, taxes, depreciation and amortization, or EBITDA, were 10% higher than its estimate.
Read also: IndiGo Reports Record Profit of ₹8,172 Crores for FY24, Experiences 6th Consecutive Profitable Quarter
Jefferies has a hold rating on the IndiGo stock and has raised the target price to ₹4,150. However, this still implies a 5% drop.
He highlighted that the better fourth-quarter result was driven by a strong rise in yields of 7% year-on-year, offsetting cost pressures.
In another surprise move, IndiGo has talked about launching business class services by the end of 2024, the brokerage said. Yields and spreads continue to benefit from a capacity-constrained environment, Jefferies said, adding that he believes a strong move in stocks is positive.
Motilal Oswal, on the other hand, gave a neutral rating to IndiGo shares and expects a decline of ₹4,210.
Read also | IndiGo to launch business class on select routes: CEO Pieter Elbers
“Currently, 70 to 80 planes of IndiGo are grounded due to P&W engine issues and the management believes that this number would be limited. However, management is confident of adding one aircraft per week on average in FY25, with capacity and passenger growth forecasts intact in the mid-teens for FY25,” he said. -He underlines.
He added that the management has also taken several pre-emptive steps to increase its brand awareness globally, as it hopes to capture a greater share of its international market growth in the coming years.
IndiGo shares were trading 1.5 per cent lower at ₹4,333.35 on NSE at 10:32 am.
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