Goldman Sachs sets high target for IndiGo shares despite recent losses

Goldman Sachs has reaffirmed its buy rating on IndiGo with a target price of 5,900 rupees. The brokerage points to the airline's rising market share, cost advantages, and steady international growth. IndiGo's share of the domestic market grew from about 50 percent in fiscal year 2020 to about 65 percent in August 2026. This momentum is expected to continue partly due to liquidity challenges faced by the second-largest player.

Financial Results

The positive long-term outlook arrives after a difficult first quarter for the airline. InterGlobe Aviation reported a standalone net loss of 382 crore rupees for the quarter ending June 30, 2026. This compares with a net profit of 2,161 crore rupees in the same period last year. On a consolidated basis, the company posted a net loss of 238 crore rupees compared to a profit of 2,176 crore rupees previously. Revenue from operations jumped 20 percent year-on-year to 24,584 crore rupees.

Costs And Fuel

Expenses rose much faster at 35.1 percent during the quarter. Aircraft fuel expenses surged nearly 86 percent to 10,830 crore rupees. IndiGo does not hedge fuel and faced heavy pressure from soaring jet fuel prices. Crude oil prices moved above 100 dollars per barrel amid the Iran war, which added pressure alongside adverse foreign exchange movements and Middle East conflicts. Managing Director Rahul Bhatia noted that demand stayed healthy while the airline served over 31 million passengers.

Stock Performance

IndiGo shares rose as much as 0.6 percent during Tuesday's session to reach an intraday high of 4,895.90 rupees on the BSE. Despite this move, the stock fell 3 percent over one week, 6 percent over one month, and 8.5 percent over three months. Over six months, shares gained 18.5 percent, but dropped 15 percent over a one-year period. Over five years, the airline delivered multibagger returns with a 142 percent gain.

Context

Airline profit margins often fluctuate based on global crude oil prices because jet fuel forms a major part of operating expenses. Companies that do not hedge fuel are directly exposed to sudden price spikes caused by geopolitical conflicts. Major carriers generally expand international routes to diversify revenue beyond domestic operations.