IndiGo Share Price: The brokerage firm, Morgan Stanley, is bullish on InterGlobe Aviation (IndiGo). It has maintained an overweight rating, considering it a top pick, despite lowering its target price to Rs 5,913 from Rs 6,498. Here are the 5 reasons why:
Financial Impact: High fuel prices and weak demand are causing near-term pressures, leading to a sharp reduction in FY27 earnings per share forecasts. According to the firm, the company’s near-term performance is affected by high fuel costs and weak demand.
Earnings per share (EPS) for FY27 have been sharply reduced due to ongoing cost pressures.
Further, the firm said that the company’s recovery is projected for the second half of FY27, supported by a strong balance sheet and industry position.
The firm further highlighted that the company maintains a strong balance sheet and solid industry positioning.
The company is currently valued at approximately 9.8 times its projected EBITDA for March 2028.
As a result of the US/Iran conflict commencing in February 2026, Iran has heavily restricted commercial shipping in the Strait of Hormuz by means of attacks and military threats to maritime vessels, disrupting a major share of the global supply of oil. The subsequent restriction in the global oil supply has had a significant adverse impact on the aviation industry.
Jet fuel availability Crisis
Approximately twenty per cent of the world’s oil supply is currently unable to pass through the Strait of Hormuz due to Iranian restrictions. This has led to growing concerns over jet fuel availability. Europe and Asia rely heavily on the Middle East for their jet fuel supplies, and because jet fuel has a relatively short storage life, airports depend on continuous, rolling deliveries. As a result, even short-term disruptions can quickly create significant supply vulnerabilities.
(Disclaimer: The above article is meant for informational purposes only, and should not be considered as any investment advice. ET NOW DIGITAL suggests its readers/audience to consult their financial advisors before making any money related decisions.)
