InterGlobe Aviation
67% share; bought at the fuel trough
- Last close
- ₹4,872.00
- 29 Sept 2026 · reference
- 1D · 1M
- −0.1% · −5.7%
- price-only
- Weight
- 2.7%
- 31 Jul 2026 · Aug rank 14
- Thesis review
- 8 Sep 2026
- Why We Own, p56
Approved description
IndiGo is India's largest airline, an Airbus A320-family low-cost carrier operating 432 aircraft to 97 domestic and 46 international destinations (Q1FY27). It carried 80.8 lakh domestic passengers in July 2026 for a record 67.4% domestic market share (Air India group 24%, Akasa 5.5%, SpiceJet 1.6%). International is ~33% of capacity and targeted at ~40% by 2030; it has ~900 aircraft on order for delivery through 2035.
- 01Structural monopoly-like domestic position: record 67.4% domestic share in Jul-2026 (DGCA) while Tata group fleet shrank 13% YoY, giving IndiGo pricing power - yields +21% YoY in Q1FY27 and PRASK guided +25% in Q2FY27.
- 02The FY26 loss (Rs -2,394 cr) and Q1FY27 loss are fuel/FX-led, not demand-led: fuel cost +86% YoY (Rs 10,833 cr) after Brent rose ~50% and Singapore jet fuel ~120% post the late-Feb-2026 West Asia conflict; ex-forex Q1 loss was only ~Rs 6 cr.
- 03Operating leverage on normalisation: FY25 EBITDA was Rs 18,102 cr (22% margin) on Rs 80,803 cr revenue; any retracement of ATF from ~Rs 140/l toward the pre-conflict level restores multi-thousand-crore profits, hence Buoyant's PE collapsing from 141x FY27e to 64x FY28e.
- 04Long-runway growth: ~900 aircraft on order to 2035, 1,000+ LEAP engine MoU, international share 33% heading to 40% by 2030; capacity growth deliberately held to +2.9% in Q1 to protect yields.
- 05Balance-sheet resilience: Rs 52,885 cr cash at Jun-2026 against mostly lease-related borrowings of Rs 77,749 cr lets it outlast SpiceJet (negative net worth) and weaker peers through the fuel spike.
Reference close, with results-period markers
- 1Q Sep-25 end · 30 Sept 2025
- 2Q Dec-25 end · 31 Dec 2025
- 3Q Mar-26 end · 31 Mar 2026
- 4Q Jun-26 end · 30 Jun 2026
Quality score, technicals and Buoyant Score
Computing the scorecard…
Latest quarter · Q Jun-26
| Line (₹ cr) | Q Jun-26 | YoY | QoQ |
|---|---|---|---|
| Net Sales | 24,584 | +19.9% | +9.6% |
| Operating Profit | 3,267 | −37.5% | +303.3% |
| Net Profit | -238 | turned loss making | loss narrowed |
Reported vs internal estimate: internal quarterly estimates are not in the supplied package; consensus feed not licensed. YoY/QoQ per PRD §12.5 (transitions, not %, on non-positive bases).
Position and valuation context
General industrial/consumer/IT preset: growth, margins, ROCE/ROIC, working capital, FCF, net debt; P/E, EV/EBITDA.
Sell-side targets are third-party views, not Buoyant's; the upside is recomputed on our reference close, so it differs from the figure printed at the broker's price date.
Valuation range
No headline target on this page; the book quotes the thesis and the risk rather than a target.
What we watch
- Q2FY27 results (late Oct/early Nov 2026): guided PRASK +25% YoY, flattish capacity - a return to profit would validate the fuel-only thesis.
- Monthly ATF resets (1-Oct, 1-Nov 2026) and any de-escalation in West Asia / Strait of Hormuz lowering crack spreads.
- Winter schedule international expansion (A321XLR/A350 inductions) and DGCA monthly share data showing continued 65%+ share.
- Sustained ATF above Rs 120-140/l (fuel ~40% of costs) with a weak rupee would keep FY27 loss-making; Buoyant's 141x FY27e implies very thin earnings.
- Demand elasticity: July-2026 domestic traffic already fell 4.8% YoY as fares rose; further yield increases may not stick.
- Promoter overhang: promoter holding down 26.2 pts over 3 years to 41.6% as the Gangwal family exits; plus large lease liabilities (borrowings Rs 77,749 cr).