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Shares of InterGlobe Aviation Ltd., the parent of IndiGo, fell as much as 8% on Monday, December 8, after multiple brokerages flagged rising operational and cost pressures at India’s largest airline.
The stock is now on a seven day losing streak, wiping out nearly ₹36,000 crore in market value over this period.
Investec maintained its 'Sell' rating on the stock with a price target of ₹4,040, warning that hopes of a strong third quarter recovery are diminishing after a weak first half of FY26.
The brokerage said aviation turbine fuel prices have risen 6% quarter on quarter, while the rupee has slipped to a new low of 90 per dollar, adding to the airline's cost burden.
The recent wave of large-scale flight cancellations, triggered largely by IndiGo's transition to the revised flight duty time limitation norms, has further eroded expectations of an earnings rebound.
IndiGo must fully comply with the new duty-time norms by February 10, 2026, a shift that may require around 20% more pilots per aircraft. Investec estimates this could push costs higher by roughly ₹0.10 per available seat kilometre.
If fares are not raised to offset the increase, it could cut profit before tax by nearly 25%, based on its assumption of a ₹0.40 spread between revenue per available seat kilometre and cost per available seat kilometre.
UBS, which has a 'Buy' rating on InterGlobe Aviation, has cut its price target to ₹6,350. The brokerage said inadequate preparation for the revised duty-time norms has caused huge disruption.
UBS has raised its cost assumptions for FY26 to FY28 to factor in additional crew requirements and higher operating expenses due to the rupee’s depreciation against the dollar.
It added that IndiGo's long-term growth outlook remains strong, led by international expansion that provides both a natural currency hedge and margin stability. However, it will continue to monitor the situation closely.
Key risks include any contingent liabilities arising from the operational meltdown and further weakening of the rupee.
Kotak Institutional Equities has maintained its 'Add' rating but slashed its price target to ₹5,700 from ₹6,400 earlier.
Jefferies has a 'Buy' rating on the airline, with a price target of ₹7,025. The brokerage said IndiGo has been hit the hardest by the new duty-time rules, which reduce pilot duty hours and increase crew requirements, straining its lean, high-utilisation model.
The rule change collided with IndiGo's capacity expansion, technology constraints and airport congestion, resulting in cascading disruptions. The airline is now recalibrating schedules and expects operations to normalise by mid-December.
Jefferies said that while the aviation sector remains consolidated, IndiGo continues to face rising costs from operational disruptions, a weaker rupee and higher crew expenses.
Separately, theaviation regulator has given IndiGo CEO Pieter Elbers and the airline's accountable manager a one time 24 hour extension to respond to the show cause notice issued on December 6 over recent nationwide operational disruptions and compliance lapses.
The two sought more time on December 7, citing operational constraints amid large scale disruptions across multiple airports. After reviewing the request, the regulator extended the deadline only until 6 pm on December 8 and made it clear that no further extensions will be granted.
IndiGo said its network is on track to stabilise by December 10, reporting improved on-time performance and a reduction in cancellations.
The airline operated more than 1,650 flights on Sunday, up from 1,500 a day earlier, with on-time performance improving to 75% from 30%. Refunds and baggage processing are now being handled at full scale for both direct and indirect bookings.
These updates followed the airline's decision to set up a Crisis Management Group comprising Chairman Vikram Singh Mehta, board directors Gregg Saretsky, Mike Whitaker and Amitabh Kant, and CEO Pieter Elbers.
The group has been tasked with restoring operational integrity and resolving cancellations and delays as quickly as possible.
Elbers had earlier acknowledged that more than 1,000 flights were cancelled on December 5 alone, attributing the chaos to a major reboot of IndiGo's operational systems.
