IndiGo Shares Fall Nearly 4% After Weak Q3 Results Despite Steady Revenue Growth

IndiGo Faces Short-Term Pressure as One-Time Costs Hit Q3 Results, Brokerages Still See Upside Potential of Rs. 6,300

IndiGo’s share price fell sharply on Friday after InterGlobe Aviation announced weak Q3 results. The aviation stock dropped nearly 4% in early trade on January 23. Investors reacted to a steep fall in profit despite steady revenue growth. The result caused short-term pressure on the stock.

InterGlobe Aviation shares opened at Rs. 4,840.10 on the BSE. The previous close stood at Rs. 4,913.80. The IndiGo share price slipped further and touched an intraday low of Rs. 4,723.60. Later, the stock recovered some losses and traded near Rs. 4,827 in the morning session. Heavy selling marked the early hours of trade.

IndiGo Q3 Results Impact Stock Sentiment

IndiGo Q3 profit declined 77.55% year-on-year to Rs. 5,498 million. The sharp fall came due to high one-time expenses. The airline reported a cost of Rs. 9,693 million linked to new labour laws. Another Rs. 5,772 million came from operational disruptions during December. These factors hurt earnings during the quarter.

Revenue numbers remained stable despite the profit fall. Consolidated revenue from operations rose 6.2% year-on-year to Rs. 2,34,719 million. Q3 EBITDAR slipped slightly by 0.8% to Rs. 60,084 million. IndiGo increased capacity by 11.2% to 45.4 billion. Passenger numbers grew 2.8% to 31.9 million. Demand for air travel stayed firm during the quarter.

Brokerages Remain Positive on Long-Term Outlook

IndiGo’s share price performance over the long term remains positive. The aviation stock has gained nearly 22% over the last year. Market leadership and a strong route network continue to support growth. Analysts believe the Q3 impact reflects temporary issues.

Emkay Global Financial Services maintained a buy rating on InterGlobe Aviation. The brokerage set a target price of Rs. 6,300. Emkay expects a gradual improvement in operations. The firm sees growth opportunities despite near term challenges. Fuel costs, currency movement, and operational risks remain key concerns.

Motilal Oswal Financial Services also kept a buy call on the aviation stock. The brokerage fixed a target price of Rs. 6,100. Motilal highlighted strong domestic demand and rising international routes. The return of grounded aircraft may support earnings in the upcoming quarters.

JM Financial upgraded the stock to an add rating from reduce. The brokerage lowered the target price to Rs. 5,420. Earnings estimates fell due to currency weakness. However, confidence in long-term demand stayed intact.

After Q3 results, experts suggest caution. Existing investors may hold the stock amid volatility. Fresh buying may wait for clearer signs of recovery.