InterGlobe Aviation shares gained on Monday as investors looked past the airline’s March quarter loss and focused on strong fare trends, industry-wide capacity constraints and bullish commentary from brokerages.

The stock rose as much as 5.2 per cent to ₹4,633.90 on the NSE in early trade from the previous close of ₹4,405 before settling at ₹4,453.30.

The parent of IndiGo reported a consolidated net loss of ₹2,536.9 crore for the quarter ended March 2026 against a net profit of ₹3,067.5 crore in the year-ago period. The sharp y-o-y decline came amid higher fuel costs, rupee depreciation, foreign exchange losses and disruptions linked to Middle East airspace closures and aircraft groundings.

Brokerages, however, said the market was focusing on the longer-term earnings outlook driven by supply shortages in the aviation sector, rising fares and IndiGo’s continued market share gains.

Elara Capital said the recent correction in InterGlobe Aviation shares, which have fallen around 25 per cent over the past six months compared with a nearly 10 per cent decline in the Nifty, was driven by temporary operational disruptions and macro concerns such as crude oil prices and INR depreciation. The brokerage said the market was overlooking a prolonged industry capacity shortage that is supporting higher airfares.

According to Elara Capital, its tracking of around 400 domestic routes showed 15-day advance fares rose about 17 per cent y-o-y in April-May 2026, while 30-day advance fares on IndiGo’s international network increased around 40 per cent y-o-y. The brokerage noted that the summer schedule indicated a nearly 6 per cent y-o-y decline in domestic departures even as competitors reduced capacity, creating a favourable environment for pricing and market share expansion. It reiterated a buy call with a target price of ₹6,020.

Motilal Oswal also maintained a buy rating with a target price of ₹5,600, citing confidence in IndiGo’s long-term growth strategy despite near-term headwinds. The brokerage highlighted management commentary around the airline’s accelerating aircraft ownership strategy, supported by total cash reserves of ₹51,600 crore, including ₹36,200 crore of free cash.

The brokerage said IndiGo prepaid loans on 17 aircraft during FY26 and currently owns 36 unencumbered aircraft valued at over ₹9,500 crore. It also pointed to the company’s planned investment of $820 million into its GIFT City entity for aviation asset acquisition.

On operations, Motilal Oswal said the Middle East conflict had led to the cancellation of around 160 daily flights, though international capacity had recovered from about 20 per cent initially to nearly two-thirds currently. Full normalisation is expected by end-June, with demand likely to improve q-o-q in the second quarter of FY27.

The brokerage added that Pratt & Whitney aircraft-on-ground cases remained in the “40s” and are expected to reduce to the “30s” by the end of FY27. IndiGo added 72 aircraft in FY26, taking its total fleet to 441 aircraft, while deployment of A321XLR aircraft has supported expansion into European destinations such as Athens and Istanbul.

Motilal Oswal said it expects revenue and EBITDAR to clock a CAGR of 13 per cent and 46 per cent, respectively, over FY26-28.

Global brokerages Jefferies and Goldman Sachs maintained buy ratings on the stock with target prices of ₹5,380 and ₹5,200, respectively.

According to Jefferies, IndiGo’s near-term outlook remains “clouded” despite the airline maintaining its long-term leadership position in the Indian aviation market. The brokerage noted that elevated fuel, forex and maintenance costs are likely to weigh on profitability in the coming quarters, even as the carrier attempts to pass on higher expenses through fare hikes.

Jefferies highlighted that IndiGo has shifted towards a more measured, profitability-led growth strategy, lowering planned capacity expansion and focusing on network optimisation and fleet efficiency. While the brokerage cut its earnings estimates for FY27 and FY28, it retained a buy rating on the stock with a revised target price of ₹5,380, citing confidence in IndiGo’s dominant market share and long-term growth potential.

Bank of America reiterated its buy rating on the stock with a target price of ₹5,100.

Kotak Institutional Equities also retained a buy rating with a target price of ₹5,400. The brokerage said the reported loss was lower than expected despite a large mark-to-market foreign exchange loss. It added that while grounded aircraft continue to weigh on profitability, current pricing trends suggest the industry is testing demand elasticity successfully and significant relief from aircraft groundings is likely by FY28.

Published on June 1, 2026