Motilal Oswal has issued a bullish call on India's largest airline carrier, IndiGo (InterGlobe Aviation), expecting an upside of 29 per cent in the stock, driven by rising domestic air travel demand. According to reports from NDTV Profit, the brokerage has assigned a BUY rating for the stock and maintained a target price of ₹5,600. The target implies an upside of around 29 per cent from current levels, reflecting strong confidence in the airline's growth prospects despite persistent near-term headwinds including airspace disruptions in the Middle East, high fuel costs and INR depreciation. IndiGo's stock has seen significant fluctuations, including a recent drop of nearly 5% following news of a major stake sale by a promoter entity, but has delivered impressive returns of 142.95% over the last two years, indicating strong investor interest and confidence in the airline's long-term potential.
Fleet expansion remains a key growth driver, with IndiGo planning to increase its fleet from 441 to 550 aircraft by FY30. As reported by NDTV Profit, the company's order book remains robust, with 901 aircraft yet to be delivered, ensuring long-term visibility on capacity growth. This aggressive expansion strategy positions IndiGo for significant operational scale in the coming years, with the brokerage highlighting the company's robust fleet expansion pipeline as a key growth lever. Looking ahead, a gradual normalisation of international operations, easing Pratt & Whitney-related groundings, fleet expansion (including A321XLR-led international deployment), and resilient demand trends are expected to support performance recovery over the coming year.
On the network and product side, the airline continues its premiumisation strategy, with business class seating expected to increase by over 54 per cent by FY27. According to NDTV Profit, its loyalty programme, BluChip, has already surpassed 11 million members within 20 months of launch, demonstrating strong customer engagement and retention. The airline maintains its position among the lowest-cost airlines globally, reporting a cost per available seat kilometre (CASK) of 3.38 US cents. Additionally, the brokerage notes that multiple growth levers such as premiumisation, expansion in cargo and acceleration in loyalty position the company for continued market share gains and healthy earnings growth in the medium term.
Management has indicated expectations of mid-teen revenue growth, supported by pricing strength and network expansion initiatives. As reported by NDTV Profit, Motilal Oswal estimates a 13 per cent revenue CAGR and a 46 per cent EBITDAR CAGR for FY26–28E*. The airline is also focused on fleet modernisation, targeting over 95 per cent next-generation aircraft by FY30. Despite persistent near-term challenges including rising fuel costs, a depreciating rupee, and increased competition from new entrants in the aviation market, the brokerage remains confident about IndiGo's growth strategy, anchored by India's strong domestic demand base and the company's steadily expanding international network.
IndiGo currently holds a dominant 54.6% market share in the domestic aviation sector, significantly ahead of its competitors. According to NDTV Profit, Air India follows with 9.2%, while Vistara holds 8.8%. This strong market position highlights IndiGo's leadership and resilience in the industry, especially as it expands its international operations. In the previous session, the BSE Sensex component fell over 2.5 per cent, or ₹117, to trade at ₹4,361.40, according to ET Now. Despite broader market weakness, the brokerage's positive outlook on IndiGo reflects confidence in the airline's ability to capitalize on domestic travel demand and execute its expansion strategy effectively.
