Shares of InterGlobe Aviation were in focus today after Kotak Institutional Equities assigned a ‘buy’ call with a target price of Rs 2,400. The target price amounts to an upside of Rs 18% against the previous close. The brokerage believes that market share risk will impact its financials to a lesser extent. It expects a near-term improvement in profitability.
InterGlobe Aviation stock has gained 7% in the last three sessions. Interglobe Aviation stock is trading higher than the 5 day, 20 day, 50 day, 100 day and 200 day moving averages. InterGlobe Aviation stock gained 1.23% to Rs 2052.95 today against the previous close of Rs 2028.10 on BSE. Earlier, InterGlobe Aviation shares opened lower at Rs 2,015.
Total 6237 shares of the firm changed hands amounting to a turnover of Rs 1.26 crore. The stock has gained 2.02% in one year and gained 1.29% since the beginning of this year. The shares have climbed 6.74% in a month. Market cap of the firm rose to Rs 78,700 crore.
The aviation stock hit 52-week high of Rs 2,282 on February 10, 2022 and a 52-week low of Rs 1,513 on June 20, 2022.
Kotak Institutional Equities said, “Our recent interaction with management highlights customers willingness to spend & limited impact that recent new airlines have had on its business. Tata Group may impact INDIGO’s market share in top metro routes, not pricing. We note upside risks to our unchanged RASK-CASK assumptions for FY23/24. We note an upside risk to our unchanged FV from higher-than-expected yields.”
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Meanwhile on December 20, Emkay Global assigned a buy call to stock with a target price of Rs 2,560 for a year. The target amounted to an upside of 26.29% to the previous close of Rs 2,027.
“We initiate coverage on Indigo, valuing it on DCF method (FY25-34), building Rs 4.6-4.7 long-term yield, Rs 3.9-4.0 CASK, fleet expansion to 652, ASK CAGR of 9%, PLF of 85-86% and WACC/TG of 12.7%/4%. Our target price of Rs 2,560 per share implies FY25E target P/E of 21x. Key risks: Adverse currency/fuel-prices, global recession hitting air travel and severe operational issues,” the brokerage said.
In the second quarter of the current fiscal, InterGlobe Aviation reported widening of losses to Rs 1,583.34 crore mainly due to higher expenses. The airline had a loss of Rs 1,435.66 crore in the year-ago period. Revenues rose to Rs 12,852.29 crore in the second quarter of the current fiscal, from Rs 5,798.73 crore in the same period a year ago. In the September quarter, total expenses rose to Rs 14,435.57 crore.
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