Global brokerage firm Jefferies has reaffirmed its ‘buy’ rating on InterGlobe Aviation, the company that runs IndiGo, and raised its target price for the stock from Rs 5,100 to Rs 5,260. They believe IndiGo is a ‘unique, strong franchise’. Jefferies highlighted that IndiGo has a strong position in the market and expects positive changes to come, even though the airline recently faced some challenges.
IndiGo controls over 60% of the domestic air travel market in India, making it a leader in the industry. The stock price has not performed well lately after the company reported disappointing second-quarter results, mainly due to higher operating costs that affected their profits.
However, Jefferies predicts that these costs will normalize soon, suggesting that the problems causing high costs are temporary. They maintain a positive outlook for IndiGo, especially as the airline expands its capacity while many of its competitors are struggling.
Additionally, Jefferies noted that IndiGo has a cost advantage over its rivals. This means they can run their operations more efficiently, which could lead to lower ticket prices for passengers.
As of Thursday at around 1 PM, IndiGo’s share price was stable at Rs 4,260.45 on the BSE. Over the past year, the stock has jumped by 41.4%. However, it has dropped by 9.4% over the last three months, according to NiftyStat.
(Disclaimer: The opinions and views expressed by experts are theirs alone and do not necessarily reflect the views of Thellv.news)
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