InterGlobe Aviation Faces Profit Pressure Amid Volatile Oil Prices, Travel Disruptions
New Delhi, March 23 – InterGlobe Aviation, the parent company of IndiGo, may face challenges to its net profit in the upcoming financial year due to fluctuating oil prices and travel disruptions related to the conflict in the Gulf, according to analysts at Goldman Sachs.Goldman Sachs Lowers InterGlobe Aviation Target Price
Analysts at Goldman Sachs have reduced their target share price for InterGlobe Aviation to Rs 5,200 from Rs 6,000 previously – representing a 13.33 per cent decline. Goldman Sachs has maintained a ‘buy’ rating on the stock, highlighting IndiGo’s market leadership position.Reduced Profit Projections
The analysts project almost no profit for FY27E, citing ongoing volatility in oil prices and a weakening earnings outlook. They have also lowered IndiGo’s international capacity estimates for the June quarter, particularly for routes to the Middle East, considering higher jet fuel costs, a significant expense for the airline.Impact of the Gulf Conflict
Air travel in the region has been affected by the escalation of the Iran conflict, leading to frequent airspace closures across Gulf countries. Refined fuel prices have increased more rapidly than crude oil due to supply risks and export restrictions.Revised Operating Income Estimates
Goldman Sachs has reduced its operating income (EBITDAR) estimates for FY26 to Rs 13,700 crore and for FY27 to Rs 15,900 crore, down from previously projected figures of Rs 18,300 crore and Rs 25,800 crore, respectively. Earnings per share estimates have also been significantly reduced for both years.Long-Term Strategic Factors
“While investor focus in the near term will be on earnings sensitivity, over the longer term, the ability to control fixed costs and maintain balance sheet strength will be key differentiators,” the brokerage stated.Share Price Decline
IndiGo’s shares declined as much as 6.1 per cent on Monday, reaching an intraday low of Rs 3,894.80 apiece on the BSE. The stock has experienced a decline of approximately 20 per cent over the past month, 30 per cent over the last six months, and 20 per cent over the past year.Disclaimer: Due care and diligence have been taken in compiling and presenting news and market-related content. However, errors or omissions may arise despite such efforts.
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