Mumbai, India – September 1, 2026 – Despite persistent increases in air turbine fuel (ATF) prices, ICICI Securities has reiterated its 'Buy' rating for InterGlobe Aviation Ltd, the parent company of IndiGo. The domestic brokerage firm has set an unchanged target price of Rs 6,020, suggesting that the current market correction presents a valuable buying opportunity for investors.
Analyst Confidence Amidst Fuel Price Headwinds
ICICI Securities acknowledged that higher ATF prices are likely to impact IndiGo's financial performance in the September and December quarters, based on August trends. However, the firm emphasized that this does not alter its fundamental investment thesis on the airline. Analysts highlighted several factors underpinning their positive outlook:
- Significant industry consolidation.
- Robust travel demand, evidenced by a more than 20 percent yield hike in Q1 and a projected 25 percent yield hike in Q2.
- Stabilization of the Indian rupee.
- Expectation for non-fuel Cost per Available Seat Kilometer (CASK) to stabilize at an annual level moving forward.
Market Share Growth and Future Outlook
IndiGo has demonstrated strong performance in the domestic market, with its market share rising to 67.4 percent in July 2026, up from 66.3 percent in June. This continues an upward trend from 64.9 percent in May and 65 percent in April. While the airline's international market share saw a decrease to 50.1 percent in July, down from 54.7 percent in June, this was primarily attributed to the restoration of international routes by Air India.
Looking ahead, IndiGo's ambitious 2030 outlook provides substantial medium-term earnings visibility. The airline aims for an annual capacity of 300 billion Available Seat Kilometers (ASKs), implying a mid-teens compounded annual capacity growth. This plan includes serving 20 crore passengers and operating over 3,000 daily departures, offering constructive valuation guidance for investors.
Financial Projections and Key Risks
ICICI Securities has factored in a Revenue per Available Seat Kilometer (RASK) of Rs 5.74 for FY27 and Rs 5.54 for FY28. The Rs 6,020 target price is based on 25 times the estimated FY28 earnings per share (EPS) of Rs 241, post-full tax.
"At this juncture, the industry has consolidated, travel demand is high (over 20 per cent yield hike in Q1 and 25 per cent yield hike guidance in Q2 is noteworthy validation to that end), and with stable currency incrementally, we also expect non-fuel CASK to stabilise hereon at an annual level," ICICI Securities stated in its note.
While the brokerage acknowledges key risks such as a volatile geopolitical environment or business disruptions similar to those experienced in FY26, it believes IndiGo's strong competitive position significantly hedges against these challenges, a resilience demonstrated multiple times historically. The ongoing model of systematically lower passenger load factor (PLF) and higher fares has also contributed to its sustained performance.