Archive · 23 Jan 2026
IndiGo Q3 Profit Drops 2% Amid Cost Pressures
IndiGo, India's largest airline, recently announced its December quarter results.
The company made a profit of around Rs 2,050 crore, but this was 2% less than the same time last year.
Two financial experts gave different opinions on the company's future.
One expert thinks the stock could go up by 24%, while another thinks it could go up by 10%.
Both experts agree that the company is facing some challenges, like higher costs and changes in how many seats they can sell.
Despite these challenges, they believe the company will do better in the long run.
The company plans to grow by 10% in the next few months, but they expect to make a little less money per seat due to last year's high travel demand.
IndiGo reported a 2% year-on-year drop in adjusted profit for Q3FY26, with EBITDAR remaining flat.
Brokerages Motilal Oswal and JM Financial have differing views on IndiGo's stock potential, with target prices of Rs 6,100 (24% upside) and Rs 5,420 (10% upside) respectively.
IndiGo expects a 10% growth in available seat kilometres (ASK) in the March quarter, driven by international routes.
Revenue per available seat kilometre (PRASK) is expected to decline in the mid-single digits year-on-year due to a high base from Maha Kumbh-related travel.
Unit costs excluding fuel and foreign exchange are likely to rise at a mid-single-digit pace in FY26.
- Who
- IndiGo (InterGlobe Aviation)
- What
- Reported a 2% drop in Q3 profit, with mixed brokerage outlooks
- When
- December quarter (Q3FY26), results announced on January 22
- Where
- India
- Why
- Due to higher foreign exchange losses and moderated capacity growth
Optimistic View
Cautious View
Stock Valuation
Optimistic View
Motilal Oswal recommends 'Buy' with 24% upside potential, valuing the stock at 9x FY28E EBITDAR.
Cautious View
JM Financial suggests 'Add' with 10% upside, valuing the stock at a long-term average P/E multiple of 20x.
Capacity Growth
Optimistic View
Motilal Oswal expects mid-single-digit growth in unit costs (ex. fuel and forex) for FY26, with capacity growth of 10% in the March quarter.
Cautious View
JM Financial notes moderated ASK growth guidance to 10% due to winter schedule curtailment.
Revenue and Costs
Optimistic View
Motilal Oswal anticipates a slight softening of PRASK due to a high base from Maha Kumbh-related travel.
Cautious View
JM Financial highlights higher-than-anticipated foreign exchange losses and expects a mid-single-digit decline in PRASK year-on-year.
- Adjusted Profit (Q3FY26)
- Rs 2,050 crore
- EBITDAR (Q3FY26)
- Rs 5,860 crore (flat YoY)
- EBITDA (Q3FY26, ex-forex loss)
- Rs 6,470 crore (down 2% YoY)
- Motilal Oswal Target Price
- Rs 6,100 (24% upside)
- JM Financial Target Price
- Rs 5,420 (10% upside)
- ASK Growth (March Quarter)
- 10%
- PRASK Expectation
- Mid-single-digit decline YoY
- CASK ex-fuel ex-forex Growth (FY26)
- Mid-single-digit YoY
Sources
Indian aviation flies full but bleeds cash in FY26
Air India set for record annual loss as crash airspace curbs hit turnaround plans - Telegraph India
IndiGo slips 2% as Q3 profit plunges : Why brokerages see a ‘Golden Entry’ with 24% upside potential
