IndiGo Airlines Parent Company Soars to Record Highs Amidst Positive Streak

IndiGo Airlines Parent Company Soars to Record Highs Amidst Positive Streak

VoM News Desk | December 13, 2023 | 02:43 PM IST | Travel | Follow on Google News

IndiGo Airlines Parent Company Soars to Record Highs Amidst Positive Streak Image/Mint

IndiGo Airlines Parent Company Soars to Record Highs Amidst Positive Streak

InterGlobe Aviation, the parent company of IndiGo Airlines, has been riding a remarkable upward trend in its stock price, achieving its longest streak of gains since its listing in November 2015.

As of December 13, the stock has marked an impressive twelve consecutive days of upward movement, breaking its previous record of eleven straight positive sessions. Surging during intra-day trading, the stock reached an all-time high of ₹3,006.90, rising by as much as 2.5 percent. Notably, this surge amounts to a staggering 66 percent increase from its 52-week low of ₹1,810.45 recorded on March 28, 2023.

This consistent upward momentum, resulting in a 17 percent surge in the last 12 trading sessions, reflects a robust and sustained positive trend. Investor interest is high, potentially signaling positive sentiment towards the company.

A major factor contributing to this surge is the substantial drop in crude oil prices, plummeting over 4 percent on December 12 and now hovering near $73 per barrel, a level unseen since March 2023. For airlines like IndiGo, jet fuel expenses constitute approximately 40 percent of their total costs. This significant reduction in fuel expenses has not only benefitted IndiGo but also other players in the airline industry, including SpiceJet, Air India, and Akasa.

Over the past year, IndiGo’s stock has rallied by more than 42 percent and almost 50 percent in the current year, showcasing positive returns in 8 out of 12 months. Its surge in December continues the streak from October, rising over 26 percent between October and December.

A brokerage firm, Kotak Institutional Equities, maintained a ‘buy’ rating on InterGlobe Aviation and revised its price target to ₹3,300 per share. They foresee a sustained positive impact on yields, despite capacity constraints, attributing this to the unaltered preference for air travel despite increased pricing gaps between airlines and railways.

Kotak expects the earnings per share (EPS) for InterGlobe Aviation to be ₹175.2 in FY25E and ₹198.5 in FY26E, indicating optimism about the airline’s performance in the coming years.

Technical analysis by Axis Securities suggests a bullish scenario for IndiGo, with buying ranges, target prices, and stop losses defined based on the stock’s current patterns and momentum indicators.

This sustained surge in the stock.

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