Interglobe Aviation shares hit new high on hike in airfares; stock jumps over 93% in one year

InterGlobe Aviation share price: Shares of Interglobe Aviation, the operator of IndiGo Airlines, hit an all-time high of Rs 3,755.50 apiece, up 3.4 per cent on the BSE on Wednesday, April 10, as the company has hiked the airfare by 20–25 per cent. The airline company has increased the fares on prominent routes by up to 25 per cent. The steep fare hike is due to the cancellation of Vistara flights, which has added to heavy demand. 

The stock of the company has risen over 93 per cent in the past 12 months. 

Prabhudas Lilladher, in its report issued on March 27, wrote that the following:

"We increase our EBITDAR assumptions by nearly 4 per cent over the next 2 years as we tweak our ASKM forecast given the growth commentary. Overall, we expect a revenue CAGR of 13 per cent over FY24E–FY26E with an EBITDAR margin of 23.9 per cent /23.2  per cent / 21.9 per cent in FY24E/FY25E/ FY26E (lower in last year due to higher fuel cost). Retain ‘ACCUMULATE’ with a TP of Rs3,961 (earlier Rs3,312) as we increase our EV/EBITDA multiple to 8.5x (earlier 7.5x)."

Analysts at Motilal Oswal, in their recent report on the stock, noted that IndiGo is working to increase its international presence through strategic partnerships and loyalty programs. The company has added seven new destinations and 19 routes in FY24. The company has eight strategic partners with a 27 per cent international share in terms of ASKs in FY24.

ASK is available seat kilometers.

"While we remain positive about the aviation sector, we believe INDIGO would have to navigate through various challenges in the near to medium term. We reiterate our Neutral rating on the stock with a TP of INR3,510, valuing it at 7.5x FY26E EV/EBIDTAR," the brokerage added.

Last seen, shares of InterGlobe Aviation were trading 2.68 per cent higher at Rs 3,729.15 apiece on the BSE.