Brokerage Prabhudas Lilladher positive on Indigo, gives 'Buy' rating

New Delhi [India], June 16 : An improvement in market share and declining crude prices bode well for airline operator Indigo, said brokerage firm Prabhudas Lilladher. Aviation Turbine Fuel it said is down by 9 per cent over the past two months.

The brokerage retained the 'Buy' rating with its share target price pegged at Rs 2,565.

The brokerage's view comes at a time when Go First, a competitor in the aviation sector, in early May filed for voluntary insolvency and since then its operations were kept stalled.

"Indigo has been the biggest beneficiary of this development having witnessed 390 bps (3.9 percentage points) month-on-month improvement in market share to 61.4 per cent," the brokerage said Friday.

Today, the shares of Interglobe Aviation, which operates Indigo, closed at Rs 2,434.6. Indigo shares rose about 20 per cent cumulatively so far in 2023.

Passengers carried by Indian domestic airlines during January-May 2023 were 636.07 lakhs, as against 467.37 lakhs during the corresponding period of 2022, Directorate General of Civil Aviation data showed Thursday.

In the month of May, 132.14 lakh passengers were carried by Indian domestic airlines. They registered an annual growth of 36.10 per cent and monthly growth of 15.24 per cent.

The growth in air traffic can be partly attributed to a post-Covid pent-up demand.