Synopsis:
Despite reporting a decline in Q1FY26 profit, Interglobe Aviation Ltd. (IndiGo) continued to see long-term growth potential and maintained strong operational performance. As a result stock rose 2.5 percent in today’s intraday trade.
A Large-cap, airline company stock is in the spotlight today after the announcement of its Q1FY26 financial results. Read the article below for a detailed look at its performance and future target given by the analyst.
With a market capitalization of Rs. 2,27,547 crore, the shares of Interglobe Aviation Ltd were trading at Rs. 5,887, up by 2.56 percent from its previous closing price of Rs. 5740.
Q1FY26 Results
Interglobe Aviation Ltd reported Rs. 20,496 crore in revenue for the first quarter of FY26, a slight increase of 4.73 percent over the Rs. 19,571 crore for the same period in FY25. However, from Rs. 22,152 crore in Q4 FY25, revenue decreased by about 7.48 percent sequentially.
The company reported an EBITDAR of Rs. 5,738.6 crore with an EBITDAR margin of 28 percent in Q1FY26, which is lower as compared to Rs. 5,811.1 crore and a margin of 29.7 percent in Q1FY25.
The consolidated net profit for the first quarter of FY26 was Rs. 2,176.3 crore, which was 29.05 percent lower than the Rs. 3,067.5 crore reported in the previous quarter and also decreased by 20.25 percent from the Rs. 2,728.8 crore in Q1 FY25.
Profit decline was also reflected in earnings per share (EPS), which decreased to approximately Rs. 56.31 in Q1 FY26 from Rs. 70.70 in Q1 FY25 and Rs. 79.38 in Q4 FY25.
The company’s available seat kilometers (ASK) increased by 16.4 percent to 4,230 crore kilometres, and the number of passengers it carried increased by 11.6 percent to 3.10 crore. Nevertheless, the load factor decreased by 2.1 percentage points to 84.6 percent, and the yield decreased by 5.0 percent to Rs. 4.98. On the cost side, CASK excluding fuel increased by 2.5 percent to Rs. 2.93, while fuel CASK significantly decreased by 21.9 percent to Rs. 1.38.
Management View
According to CEO Pieter Elbers, the company reported a net profit of Rs. 2,176.3 crore with an 11 percent margin in the June quarter, despite industry-wide difficulties. With over 3.1 crore passengers served, a 12 percent YoY increase, passenger demand remained high. He was optimistic about the expansion of air travel in the future and reaffirmed the company’s commitment to use its scale, network, and effective fleet to satisfy growing demand.
About the company
Interglobe Aviation Ltd (IndiGo), is India’s largest and most preferred airline, and one of the fastest-growing low-cost carriers internationally. As of June 30, 2025, it had a fleet of 416 aircraft of which 69 were on owned/finance lease, 336 were on operating lease, and 11 were on damp lease. The airline serves 91 domestic and 41 international destinations, offering low fares, on-time performance, and a smooth, hassle-free travel experience.
At the moment, the Company’s P/E stands at 33.9x, similar to the industry average of 33.2x. Its ROE and ROCE are 103 percent and 17.3 percent indicating company financial performance. Its Debt to Equity ratio stands at 7.13.
Analyst Outlook
Morgan Stanley maintained an ‘Overweight’ rating on IndiGo with a target price of Rs. 6,502, with an upside of 10.45 percent from current market price of Rs. 5,887.
In spite of a challenging quarter, Morgan Stanley praised IndiGo’s outstanding performance and predicted a quiet Q2 but a robust Q3, which could lead to outperformance. The company believes there is room for several re-ratings, citing international expansion and consolidated domestic market share as important avenues for profitable growth.
Goldman Sachs Maintained Buy rating with Target price of Rs 6000, with an upside of 2 percent from current market price of Rs. 5,887. Goldman Sachs stated that IndiGo’s Q1 results were cost-driven, and that weak demand would likely result in lower capacity growth in Q2.
However, the most important short-term indicators will be increasing yield and daily traffic. The company is still optimistic about IndiGo’s long-term prospects, particularly with regard to growing its global operations.
Written by Akshay Sanghavi
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