Goldman Sachs Slashes IndiGo Target, Warns of Near-Zero FY27 Profit

Analysts at the global brokerage have lowered their share price target for InterGlobe Aviation to Rs 5,200 from Rs 6,000 earlier -- a decline of 13.33 per cent. Goldman Sachs has maintained a 'buy' rating on the stock, citing the airline's market leadership.

"In the near term, with oil prices remaining volatile and the earnings outlook weakening meaningfully, we bake in almost no profit for FY27E," analysts said, adding that the stock could remain volatile.

Goldman Sachs has lowered IndiGo's international capacity estimates for the June quarter, particularly on Middle East routes, and factored in higher jet fuel costs, the airline's biggest expense.

Air travel in the region has been impacted since the escalation of the Iran conflict, with frequent airspace closures across Gulf countries. At the same time, refined fuel prices have risen faster than crude oil due to supply risks and export restrictions.

The brokerage has reduced its operating income (EBITDAR) estimates to Rs 13,700 crore for FY26 and Rs 15,900 crore for FY27, down from earlier projections of Rs 18,300 crore and Rs 25,800 crore, respectively. Earnings per share estimates have also been sharply cut for both years.

"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 said.

IndiGo's shares on Monday declined as much as 6.1 per cent, hitting an intraday low of Rs 3,894.80 apiece on the BSE.

The stock has fallen around 20 per cent in the past month, 30 per cent in six months, and 20 per cent over the last year.

- IANS