Whalesbook
Analysts Back IndiGo Despite CEO Change
InterGlobe Aviation (IndiGo) shares climbed as much as 3% on March 11, 2026. Key brokerages HSBC and Jefferies reiterated 'buy' ratings, with price targets of ₹5,860 and ₹6,140 respectively. Both firms indicated that Pieter Elbers' resignation, cited as for personal reasons, would not lead to a major strategic shift. Founder Rahul Bhatia has stepped in as interim CEO, a move analysts see as leveraging his deep experience to maintain continuity.
High Valuation Faces Profit Slump and Delays
Despite the positive market reaction, IndiGo's valuation faces questions. The airline's Trailing Twelve Months (TTM) P/E ratio is approximately 36.7x, with some reports placing it between 51x-53x in early March, significantly higher than its historical average. This elevated multiple suggests investors expect considerable future growth, a view that could be tested by recent performance. IndiGo reported a steep 78% year-on-year decline in net profit to ₹550 crore for Q3 FY26, and revenue from operations fell 6% to ₹23,472 crore. This financial dip followed major operational disruptions in December 2025, stemming from crew scheduling issues and stricter flight duty regulations, which caused around 4,500 flight delays and cancellations.
Geopolitics, Fuel Costs, and Competition Add Risk
The aviation sector is highly sensitive to global events. Rising crude oil prices, above $110 per barrel in early March 2026, directly threaten airline profitability, as fuel costs account for about 40% of operations. This has already affected IndiGo, leading to flight cancellations and route adjustments due to airspace restrictions over the Middle East. UBS noted that geopolitical conflict, higher crude prices, and a weaker rupee could significantly affect airline capacity and earnings, calling for a more conservative valuation approach. While IndiGo dominates India's market, competitors like Akasa Air and the Tata-owned Air India group are expanding, potentially increasing competition. The airline also incurred ₹22.20 crore in penalties from the Directorate General of Civil Aviation for past operational disruptions.
Outlook: Steadying Operations Amid Valuation Worries
Looking ahead, investors will monitor operational stability, the search for a permanent CEO, and oil price movements. Brokerages like Jefferies and HSBC have upheld their 'buy' ratings, seeing potential for growth from current levels. Analysts at Trendlyne give a consensus 'Buy' rating with an average target price around ₹5,760, and Investing.com analysts project a 12-month target of ₹5,732.80. However, concerns about the stock's valuation persist, with some analyses suggesting it is overvalued. IndiGo's stock has recently underperformed the NIFTY 50 index, dropping over 9% in March 2026 compared to the index's 3.7% rise. Over the past year, IndiGo shares are down approximately 6.1%, while the Nifty 50 has gained 7.7%. Despite this, IndiGo's market capitalization remains near ₹1.7 lakh crore, confirming its status as India's largest airline.