Motilal Oswal keeps Buy on IndiGo, sees smoother runway for global expansion

Motilal Oswal retained its Rs 6,580 target on IndiGo, citing a 900-plus aircraft pipeline, long-haul A350 and A321XLR orders, growing fleet ownership and Bengaluru MRO integration. The broker forecasts 13% revenue CAGR and 47% EBITDAR CAGR in FY26–FY28.

— Source publishedMon, 31 Aug, 2026, 08:02 IST·First seen Mon, 31 Aug, 2026, 08:52 IST·Source NDTV Profit

What happened

Motilal Oswal reiterated Buy on IndiGo, citing international expansion, a 900-plus aircraft pipeline, CFM engine support, rising fleet ownership and Bengaluru

Key facts

  • Buy rating
  • Target price: Rs 6,580 per share
  • Valuation: 10x FY28E EBITDAR
  • India domestic market share: around 67%
  • Fleet pipeline: more than 900 aircraft
  • 60 A350 aircraft
  • 40 A321XLR aircraft
  • More than 1,000 LEAP engines for 510 A320neo-family aircraft
  • Fleet ownership: around 22%; projected around 40% by FY30
  • Hedge coverage: around 15% to 33%
  • Five-year cumulative FCFF net of lease repayments: around Rs 42,400 crore
  • Revenue CAGR forecast: 13% for FY26-28
  • EBITDAR CAGR forecast: 47% for FY26-28

Why this matters

IndiGo’s A350 and A321XLR orders create a larger platform for international route partnerships, airport access deals and adjacent aviation-services opportunities.

What to watch

  • A321XLR and A350 delivery schedules, engine availability and aircraft-on-ground trends.
  • International ASK growth versus domestic capacity growth and quarterly passenger-load-factor trends.
  • International yield, RASK and unit-cost movement as new routes mature.
  • Aircraft ownership mix, lease-rental expense trajectory and net-debt or liquidity trends.
  • Bengaluru MRO commissioning milestones, maintenance turnaround times and fleet utilization.
  • Competitive capacity additions from Air India, Akasa, SpiceJet and foreign carriers on India-linked routes.
  • Bilateral traffic-rights approvals, airport-slot availability and changes in aviation fuel or foreign-exchange costs.
  • Accelerate A321XLR network planning toward Europe, Southeast Asia, East Asia and underserved Gulf-linked markets.
  • Build international connecting banks at Delhi, Mumbai and Bengaluru to convert domestic leadership into long-haul feeder traffic.
  • Increase owned-aircraft share selectively as cash flows improve, balancing lease-cost savings against balance-sheet and residual-value risk.
  • Expand Bengaluru MRO capabilities and third-party maintenance potential to improve fleet availability and lower maintenance outsourcing dependence.
  • Use A350 induction to target premium-cabin, corporate-travel and cargo revenue pools rather than competing solely on low fares.