Jefferies cuts IndiGo target price to Rs 6,035 due to business disruption
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Jefferies cut IndiGos target price to ₹6,035 from ₹7,025, citing operational disruptions and higher costs that will dent near-term earnings. Despite trimming FY26–28 profit estimates by 13–53%, the brokerage kept its Buy rating, saying IndiGos strong market position and global expansion still support meaningful upside.
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Jefferies cut IndiGo’s target price to ₹6,035 from ₹7,025, citing operational disruptions and higher costs that will dent near-term earnings. Despite trimming FY26–28 profit estimates by 13–53%, the brokerage kept its Buy rating, saying IndiGo’s strong market position and global expansion still support meaningful upside.
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Global brokerage firm Jefferies has cut its target price on InterGlobe Aviation, the operator of IndiGo, to Rs 6,035 while retaining its ‘Buy’ rating on the stock. The brokerage sees recent operational disruptions and higher costs hitting near-term earnings, but believes IndiGo’s market position and global expansion still justify upside from current levels.
Jefferies has lowered its 12-month price target on IndiGo from Rs 7,025 to Rs 6,035, implying about 26% upside from the previous close of Rs 4,808.35.
The cut comes alongside a steep reduction in FY26–FY28 earnings estimates by 13–53%, though the brokerage has maintained its ‘Buy’ stance, citing the airline’s “proven track record”, disciplined capacity growth, and cost leadership.
The revision follows IndiGo’s decision to trim its near-term capacity and revenue guidance for the December quarter after a spate of flight disruptions between December 3 and 5.
IndiGo now expects high single- to early double-digit growth in available seat kilometres (ASK) for Q3 FY26, versus high-teens indicated earlier, and sees unit revenue falling in mid-single digits year-on-year instead of being flat to slightly positive.
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Jefferies attributes the reset to winter schedule cuts ordered by the Directorate General of Civil Aviation (DGCA) and to crew availability emerging as a binding constraint under new fatigue rules. The brokerage flags further regulatory action as a key downside risk, while any softening of the DGCA’s stance on capacity would be a positive trigger for the stock.
The report highlights a statement from IndiGo chairman Vikram Singh Mehta, who issued an unequivocal apology for the early-December disruptions that stranded passengers and said the board was involved from “day one” via a dedicated crisis management group. He rejected allegations that IndiGo engineered the crisis or compromised safety, and reiterated adherence to the new pilot fatigue norms while bringing in external experts to examine root causes.
On the brand impact, Jefferies argues that the damage to IndiGo’s long-term reputation will hinge on how quickly operations stabilise, noting that customers in markets with limited alternatives typically return once schedules normalise With IndiGo’s on-time performance already back at about 80–90% after a system reset on December 5, the brokerage does not see a lasting hit if stability is sustained in coming weeks.
"Incorporating the impact of recent disruption (ex penalty/compensation payment), escalation in employee costs & impact of INR dep, we sharply cut our estimates for FY26-FY28 by 13-53% and our target price to Rs6035, retaining Buy, on 10x Dec-27 EV/EBITDA (earlier 11x Sep-27; current target price implies 26x FY28 EPS)," the brokerage said.
The stock was trading 1.5% higher at Rs 4,888 on BSE this morning and is down 17% in the last two weeks.
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