IndiGo shares sink 3% after Rs 238 crore Q1 loss, but why are Citi and Nuvama raising target prices?

Shares of InterGlobe Aviation, the parent company of IndiGo, dropped nearly 3% on Friday after the airline reported a net loss of Rs 238 crore for the first quarter of FY27, compared to a net profit of Rs 2,176 crore in the same period last year. This loss was due to surging fuel costs stemming from the Middle East conflict.

The shares of the company tumbled to Rs 4,886 apiece on NSE on Friday morning, after the airline released its Q1 results on Thursday. Revenue from operations rose 20% year-on-year (YoY) to Rs 24,584 crore in Q1 FY27 from Rs 20,496 crore in the corresponding quarter of the previous financial year.

However, operating costs outpaced revenue growth, with total expenses surging 34% YoY to Rs 25,853 crore. The sharp rise was largely driven by an 86% YoY jump in aircraft fuel expenses to Rs 10,833 crore, significantly increasing cost pressures despite robust demand and higher revenue.

Operating metrics

IndiGo’s cost per available seat kilometre (CASK) rose to Rs 5.71 in Q1 FY27 from Rs 4.31 a year ago, reflecting higher operating costs. CASK excluding fuel also increased to Rs 3.22 from Rs 2.93.

On the positive side, yield improved to Rs 6.04 from Rs 4.98, while revenue per available seat kilometre (RASK) climbed 16.5% YoY to Rs 5.66, indicating healthy pricing power and sustained demand.

Citi on IndiGo share price

Citi maintained its ‘Buy’ rating on IndiGo and raised its target price to Rs 5,800 from Rs 5,100, implying an upside potential of 15.5% from the stock’s previous closing price of Rs 5,023.50.

The brokerage noted that IndiGo’s Q1 earnings missed its estimates at both the operating profit and net profit levels, primarily due to fuel cost inflation being significantly higher than expected, ET Now reported.
However, Citi said strong yields remained the key positive during the quarter. It added that the management’s guidance points to further improvement in pricing, backed by a focus on fleet efficiency, route rationalisation and cost control. While fuel price volatility remains a key risk, the brokerage believes IndiGo’s pricing power and market share gains continue to support its long-term outlook.
Also read | IndiGo Q1 Results: Airline reports Rs 238 crore loss vs profit YoY; revenue rises 20%

Nuvama on IndiGo share price

Nuvama maintained its ‘Buy’ rating on IndiGo and raised its target price to Rs 5,583 from Rs 5,335, implying an upside potential of more than 11%.
The brokerage said IndiGo’s Q1 EBITDA missed estimates due to elevated fuel costs, although the impact was partly offset by a robust 21% YoY increase in yields.

However, Nuvama cautioned that the seasonally weak second quarter could be even softer due to higher aviation turbine fuel (ATF) prices. It cut its FY27 and FY28 earnings estimates to factor in the higher fuel costs, but believes IndiGo is well positioned to turn near-term headwinds into long-term opportunities by replicating its successful domestic strategy in international markets, where spreads are more attractive as India emerges as a global aviation hub.

JM Financial on IndiGo share price

JM Financial maintained its ‘Add’ rating but lowered its target price to Rs 5,630 from Rs 5,800, implying an upside potential of around 12% from the stock’s previous closing price.

The brokerage noted that IndiGo’s reported loss was significantly below its estimate of a Rs 660 crore profit, mainly due to an unprecedented 86% YoY surge in fuel costs and elevated supplementary lease expenses.

“The key positive from the earnings call was management’s willingness to prioritise yields over growth. Capacity growth has remained moderate to flat in Q2 FY27 and is expected to stay in the single digits for FY27, signalling continued supply discipline amid robust industry demand,” JM Financial said.

The brokerage highlighted management’s guidance for more than 25% YoY growth in passenger revenue per available seat kilometre (PRASK) in Q2 FY27, reflecting a healthy demand-supply balance. It also noted that aircraft utilisation in the region has recovered to over 90% as Middle East operations normalise, supporting a gradual recovery in earnings once fuel cost pressures ease.

While higher ex-fuel CASK and geopolitical uncertainties could weigh on near-term earnings, JM Financial believes IndiGo’s structural earnings story remains intact. It continues to view the airline as one of the highest-quality aviation franchises globally, citing its dominant market share, disciplined capacity deployment, low-cost structure and multi-year international expansion opportunity.

IndiGo share price

IndiGo shares fell more than 4% over the past week and over 3% in the past month to close at Rs 5,023.50 on Thursday. The stock is down around 2% so far in 2026.

Over the longer term, the stock has declined 14% over the past year but has delivered returns of 88% over three years and 191% over five years.

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