IndiGo Q1FY26 Results: Despite 20% Net Profit Dip, Brokerages Reaffirm 'Buy' Rating, Fueling Investor Optimism

IndiGo shares rose 1.89% to ₹5,849 despite Q1 profit dipping 20.25% YoY to ₹2,176.3 crore. Brokerage firms Motilal Oswal and Elara Capital reaffirmed their 'Buy' ratings on the stock. Revenue from operations increased 4.73% YoY to ₹20,496.3 crore, while capacity rose 16.4% to 42.3 billion available seat kilometres.

IndiGo shares (InterGlobe Aviation) surged by 1.89% to ₹5,849 on July 31, 2025, despite a 20.25% year-on-year (Y-o-Y) decline in consolidated net profit to ₹2,176.3 crore during the first quarter of the financial year 2024–25 [1]. The stock’s performance was buoyed by positive brokerage ratings from Motilal Oswal Financial Services and Elara Capital, who both maintained their 'Buy' ratings on the stock.

The company reported a 4.73% Y-o-Y increase in revenue from operations to ₹20,496.3 crore, while total expenses rose by 10.2% to ₹19,231.9 crore. The earnings before interest, taxes, depreciation, amortisation, and restructuring or rent costs (Ebitdar) stood at ₹5,738.6 crore, with a margin of 28% [1].

IndiGo’s capacity increased by 16.4% to 42.3 billion available seat kilometres (ASKs), and the number of passengers carried rose by 11.6% to 31.0 million. However, yield declined by 5.0% to ₹4.98, and the load factor dropped by 2.1 percentage points to 84.6% [1].

The CEO, Pieter Elbers, attributed the results to significant external challenges, such as geopolitical disruptions and operational headwinds. Despite these challenges, the company reported a net profit of ₹2,176.3 crore with a net profit margin of around 11% for the quarter ended June 2025 [1].

Brokerage firms remain optimistic about IndiGo’s future performance. Motilal Oswal Financial Services expects stabilising fuel costs, the return of grounded aircraft to service, and improved demand to drive performance in upcoming quarters. They value the stock at 11x FY27E Ebitdar to arrive at their target price of ₹6,900, reiterating their Buy rating [1].

Elara Capital also retains their Buy rating, citing a weak crude oil price environment, stable aircraft deliveries from Airbus, and the return of Pratt & Whitney (P&W) engines to service. They raised the target price to ₹6,878, assuming a forward EV/Ebitda multiple of 10.5x [1].

The rise in IndiGo shares can be attributed to the company’s resilience amidst geopolitical disruptions and operational headwinds. Analysts expect the company to sustain healthy profitability with its effective cost control, strong network execution, and consistent passenger growth [1].

References:
[1] https://www.business-standard.com/markets/news/indigo-stock-up-2-despite-q1-profit-dip-what-s-fueling-investor-optimism-125073100514_1.html