IndiGo Stocks Soar as Operations Stabilize Amidst Challenges

IndiGo's Road to Recovery

Shares of InterGlobe Aviation, the parent company of IndiGo, have risen for the third consecutive session. This increase comes as the airline's operations show signs of stabilizing after several days of disruption.

On the National Stock Exchange, the stock climbed 2.35 percent to Rs 4,974.50 per share. Over the past three sessions, the stock has gained about 3 percent, indicating a positive trend for IndiGo and the aviation industry.

Challenges and Outlook

IndiGo has been under pressure from the government and passengers due to the cancellation of hundreds of flights. This was a result of changes in flight duty time limitation (FDTL) norms for pilots. Despite these challenges, HSBC has maintained a 'Buy' rating on the stock, stating that the airline's structural growth story remains intact.

The brokerage has cut its target price to Rs 5,977 per share, indicating an upside of over 20 percent from the previous closing level. UBS and Jefferies have also retained their 'Buy' calls on the stock, with target prices of Rs 6,350 and Rs 7,025 per share, respectively.

Key Factors Affecting the Stock

• Reputational damage: The mass cancellations and FDTL norms have led to reputational damage, which may impact the airline's international operations.
• Cost advantage: IndiGo still maintains a cost advantage, which is expected to help the airline recover from the current challenges.
• Staff costs: The new FDTL norms are expected to increase staff costs by nearly Rs 45 crore, which may impact the airline's profitability.

Overall, despite the current challenges, IndiGo is expected to recover and continue its growth story in the aviation industry. The stock market is watching the airline's progress closely, and investors are advised to keep an eye on the market trends and industry news for further updates.