Brokerage firm Jefferies has outlined three possible scenarios for InterGlobe Aviation, the parent company of IndiGo, with its bullish projection suggesting a potential upside of 42% and its bearish scenario indicating a downside of 12% from the reference share price of ₹4,796. According to reports from ET Now, the brokerage maintained a Buy rating on IndiGo with a base-case target price of ₹5,840, implying a potential upside of 22%. The analysis is based on different assumptions regarding IndiGo's operational performance, passenger occupancy, capacity expansion and earnings growth over FY26-FY28.
Under its optimistic scenario, Jefferies has projected IndiGo's share price reaching ₹6,800, representing an upside of approximately 42%. As reported by ET Now, the brokerage assumes available seat kilometre (ASK) growth at a compound annual growth rate (CAGR) of 15% between FY26 and FY28, alongside an occupancy rate of 87%. It expects the difference between revenue per available seat kilometre (RASK) and cost per available seat kilometre (CASK) to reach approximately ₹0.50 in FY27 and FY28. Based on these assumptions, Jefferies estimates a 30% CAGR in profit after tax, excluding foreign exchange effects, over FY26-FY28. The brokerage has valued IndiGo at 10 times its estimated September 2028 enterprise value-to-EBITDA multiple to arrive at the ₹6,800 target.
In its base case, Jefferies expects IndiGo's ASK to grow at a CAGR of 9% between FY26 and FY28, with occupancy remaining between 84-86%. According to the report, the brokerage assumes a RASK-CASK spread of ₹0.41 in FY27 and FY28, compared with a negative ₹0.02 in FY26. Based on these assumptions, profit after tax excluding forex effects is projected to grow at a CAGR of 17% over FY26-FY28. Jefferies has assigned a valuation multiple of nine times September 2028 estimated EV/EBITDA, resulting in its base-case target of ₹5,840.
According to Jefferies, IndiGo shares had declined 25% from their August 2026 highs as the prolonged West Asia conflict continued to push up aviation fuel costs. As reported by ET Now, ongoing fleet additions and lower aircraft utilisation added pressure on operating expenses. The brokerage expects IndiGo's yields to increase by approximately 25-30% year-on-year in the second quarter of FY27 as airlines pass higher operating costs on to passengers. IndiGo received 10 Airbus aircraft in September 2026, taking its calendar-year-to-date deliveries to 39. Continued fleet additions amid lower-than-normal utilisation could increase ownership costs and put further pressure on profitability.
In its pessimistic scenario, Jefferies places IndiGo's share price at ₹4,200, indicating a potential decline of around 12%. According to the report, the brokerage assumes slower ASK growth of 5% CAGR between FY26 and FY28, with occupancy declining to 82%. It also projects a negative RASK-CASK spread of ₹0.25 in FY27 and FY28, indicating that unit costs would exceed unit revenue. Under these conditions, profit after tax excluding forex effects is estimated to grow at just 5% CAGR over FY26-FY28. Jefferies has applied an eight-times September 2028 estimated EV/EBITDA multiple to derive its bearish target of ₹4,200.
