Motilal Oswal retains Buy on IndiGo, sets Rs 6,580 target
Motilal Oswal forecasts 13% revenue CAGR and 47% EBITDAR CAGR for IndiGo across FY26-28, citing fleet expansion, easing engine-related groundings, lower forex exposure and international growth.
What happened
Motilal Oswal retained its Buy call on IndiGo, forecasting 13% revenue and 47% EBITDAR CAGR in FY26-28. It expects fleet expansion, reduced forex exposure,
Key facts
- 13% revenue CAGR (FY26-28)
- 47% EBITDAR CAGR (FY26-28)
- Buy target price: Rs 6,580
- Valuation: 10x FY28E EBITDAR
Why this matters
IndiGo’s international-growth outlook strengthens the strategic case for selectively pursuing overseas route rights, partnerships and capacity opportunities that extend its network advantage.
What to watch
- Monthly grounded-aircraft count and Pratt & Whitney engine-shop turnaround timelines.
- Aircraft delivery cadence, lease extensions and the proportion of fleet operational.
- Domestic passenger yields, load factors and competitor capacity additions.
- International available-seat-kilometer growth, new route profitability and overseas market share.
- Jet fuel prices, INR/USD movement and changes in hedging or forex sensitivity.
- Quarterly EBITDAR margin, unit-cost trends and free-cash-flow conversion.
- Airport slot availability, especially at Delhi, Mumbai and other capacity-constrained hubs.
- Accelerate deployment of returned grounded aircraft onto high-density domestic and short-haul international routes.
- Prioritize international route additions and codeshare/partnership expansion to improve network feed and premium traffic capture.
- Use improved cash generation to fund fleet induction, spares, maintenance resilience and airport-slot expansion.
- Maintain fuel, currency and lease-liability risk controls as international operations increase foreign-currency exposure.
- Compete selectively on fares while protecting yields on constrained metro, business and international corridors.