IndiGo's parent company, InterGlobe Aviation, witnessed a rise of more than 1 percent in its shares on August 29, spurred by a positive analysis from Kotak Institutional Equities. The brokerage firm has bestowed a 'buy' rating on the airline's shares and set a target price of Rs 3,400, projecting a potential increase of 35.5 percent within the next year.
As of 10:05 a.m., the company's shares were trading 1.2 percent higher on the BSE at Rs 2,508.15. The upbeat assessment from Kotak Institutional Equities is rooted in IndiGo's notable progress in capturing market share in the international aviation landscape. The brokerage firm emphasized that IndiGo is strategically positioned to continue augmenting its market presence further.
The shift of IndiGo towards international operations is predicted to narrow down the competitive field, leaving room for airlines capable of expanding their global footprint. The domestic airline landscape for international travel involving India exhibited a significant transformation in the first quarter of FY24. Data indicated that domestic carriers gained around 900 basis points of market share in this sector. Notably, most international airlines experienced a decline in their market share, except for Singapore Airlines.
Among the domestic airlines, InterGlobe Aviation emerged as the leader in terms of market share, securing over 17 percent after a substantial growth of 760 basis points. Additionally, Vistara made strides with a notable increase of 310 basis points, attaining a similar market share. However, Go First and SpiceJet encountered a reduction in their market share during the same period. This promising outlook on IndiGo's market share gains and strategic positioning contributed to the positive sentiment and subsequent rise in its shares.
Kotak Institutional Equities also highlighted IndiGo's potential to make further advancements in the international arena. The endorsement of IndiGo's growth potential in the international sector has resonated well with investors, paving the way for an increase in the company's share value.
