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HomeMarket NewsHere's why JPMorgan stays cautions on IndiGo and UBS cut its price target
According to analysts, IndiGo is likely to face continued headwinds from both fuel and non-fuel costs. It also sees limited scope for yield expansion as domestic air traffic remains tepid, while growth in international traffic is beginning to moderate.
By Meghna Sen March 6, 2026, 11:20:55 AM IST (Published)
3 Min Read
Shares of InterGlobe Aviation, the parent company of IndiGo, are trading lower in early trade on Friday, March 6. The stock has declined in five of the last seven trading sessions.
Brokerage firm JPMorgan has maintained a 'Neutral' rating on the stock with a price target of ₹4,630, implying limited upside from Thursday's closing price.
The brokerage remains cautious, saying the airline is likely to face continued headwinds from both fuel and non-fuel costs.
It also sees limited scope for yield expansion as domestic air traffic remains tepid, while growth in international traffic is beginning to moderate.
Jet fuel prices had already started rising in February 2026, even before the latest escalation in the US-Iran conflict. In addition, non-fuel costs are expected to remain elevated due to the continued weakness in the Indian rupee against the US dollar.
Industry data also points to slowing demand momentum. Domestic air traffic growth slowed from 4.4% year-on-year in January 2026 to flat growth in February, while international traffic growth moderated to 6.5% and 2% year-on-year in January and February respectively.
JPMorgan has cut its FY26 and FY27 earnings-per-share estimates by 13% and 14%, respectively, to factor in higher fuel costs.
The brokerage expects oil prices to moderate by FY28, which could lead to a smaller EPS reduction of about 4%.
Meanwhile, UBS has maintained a 'Buy' rating on the stock but lowered its price target to ₹5,480.
The brokerage said the ongoing geopolitical conflict could weigh on airlines' available seat kilometres in the near term, while rising crude prices pose additional risks to earnings.
A weaker rupee against the US dollar is also seen as a medium-term headwind.
UBS expects these pressures to start affecting earnings from Q4FY26, prompting a more conservative near-term valuation approach.
However, the brokerage said IndiGo's long-term investment case remains intact, citing that industry downturns have historically favoured more efficient players.
UBS added that it continues to monitor macroeconomic and geopolitical risks, and prolonged stress in these areas could lead to a revision in its estimates.
Separately, escalating tensions in West Asia and fresh safety advisories from European regulators have forced IndiGo to suspend its Europe operations.
The airline's entire fleet of leased widebody aircraft has remained grounded for over a week since February 28, disrupting flights to key destinations including London, Manchester and Amsterdam.
27 analysts currently track InterGlobe Aviation. Of these, 22 have a 'Buy' rating, three recommend 'Hold', while two have a 'Sell' rating.
Shares of InterGlobe Aviation were trading 1.72% lower at ₹4,435.20 on Friday. The stock has declined about 10% over the past one month.
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