InterGlobe Aviation Limited's stock continued its rally for the sixth straight session on February 24, 2025, touching ₹4,543 per share, reflecting a 7% surge over this period. Analysts have maintained a positive outlook, with one research firm placing the stock on a 90-day positive catalyst watch and increasing the target price to ₹5,200 from ₹5,100. They reiterated a "buy" rating, citing strong market fundamentals. Given the stock's recent momentum, investors looking to buy shares online have shown keen interest.
Strong market presence and demand fuel growth
The airline's dominant market share and increasing air traffic demand are seen as primary growth drivers. A rise in passenger traffic, particularly to Uttar Pradesh airports for the Maha Kumbh event, has contributed significantly to the increased demand. Despite seasonal fluctuations, analysts predict an improvement in passenger load factors (PLFs) in Q4FY25, which could lead to stronger yields.
Revenue surges, but profitability faces pressure
In Q3FY25, the company reported a 14% year-on-year (YoY) revenue increase, reaching ₹22,111 crore. This growth was driven by a 12% rise in available seat kilometres (ASK) and a 13.5% increase in revenue passenger kilometres (RPK), reflecting higher passenger volume and expanded capacity. However, net profit declined by 18% YoY to ₹2,449 crore, mainly due to rising operational costs.
The cost per available seat kilometre (CASK), excluding fuel, jumped 23.1% year over year to ₹3.25. Inflationary pressures and increased operational expenses have strained margins, affecting overall profitability.
Analysts remain optimistic despite cost pressures
Despite cost challenges, the airline's earnings before interest, tax, depreciation, amortisation, and rent (EBITDAR) grew by 10.7% to ₹6,059 crore. However, the EBITDAR margin slipped by 70 basis points year-on-year to 27.4%. Analysts maintain a positive stance on the stock, highlighting the airline's strong market position and ability to capitalise on growing air travel demand.
A global brokerage firm has also raised its target price to ₹5,260 per share, citing the airline's expanding capacity at a time when competitors face operational constraints. The company's ability to maintain a lower cost structure compared to rivals further strengthens its competitive advantage.
Investors eye further upside
With strong demand and market presence, InterGlobe Aviation remains a preferred stock in the aviation sector. As of 11 AM on February 24, 2025, the shares were trading at ₹4,546.96, reflecting sustained investor confidence. Analysts continue to recommend a buy stance, expecting further growth in the coming quarters. As interest remains high, those looking to buy shares online may find the stock an attractive option for portfolio expansion.
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