Jefferies double upgrades this largecap travel company as it charts new growth avenues

Shares of Interglobe Aviation- the parent company operating Indigo airlines are in focus in Thursday's session after Jefferies double upgraded the stock to 'buy' from 'hold' and also raised the target to Rs 5,225 from Rs 4,400. The suggested price implies potential gains of 22 per cent from the last close.

In the previous day's trade, the stock ended at Rs 4,298.7 apiece on the BSE.

Meanwhile, in a stock exchange filing, the airline company has received two demand orders and the company is in the process of contesting this Appeal order before the Appellate Tribunal.

There is no material impact on financials, operations or other activities of the company, said the company in its filing with the exchanges.

Global brokerages view on Indigo stock

Global brokerage Jefferies has maintained its bullish stance on the counter and has double upgraded the stock from 'hold' to 'buy'. The company raised the target to Rs 5,225 from the earlier pegged target of Rs 4,400, implying an upside of 22 per cent. The brokerage held that the company has kept in the last 12-18 months. Further, it mentioned that there is a long runway and IndiGo is consistently flying ahead including new avenues. 

Jefferies pointed out that though FY24 spreads may not repeat, but should sustain at healthy levels. IndiGo remains in the driver's seat, with new avenues of growth, it added. The company has also performed well on the operational front and has consistently surprised in past 12-18 months as it maneuvered through cost/capacity headwinds. The precarious industry capacity situation has kept yields/spreads healthy, it added.

HSBC also maintained its 'buy' rating on the stock with a raised target of Rs 5,165 per share, implying over 20 per cent gains. The company's business class launch ends Vistara/Air India monopoly, positioning its product close to the premium economy at Vistara. The measure may not be margin accretive in the near term, but it could reduce leakage of corporate traffic & strengthen positioning of the company in the travel market.