Shares of InterGlobe Aviation, the parent company of IndiGo, surged over 5% in early trade on Monday as investors cheered the airline's March-quarter earnings announced after market hours on Friday.

Despite reporting a loss in the March quarter amid heightened volatility, the stock gained momentum as the results met market expectations. The airline's profitability was impacted by a spike in crude oil prices due to the West Asia conflict, which led to higher fuel expenses, increased foreign-exchange losses, and elevated operating costs.

Reacting to Q4 numbers, IndiGo shares rose as much as 5.16% to ₹4,633.45 on the BSE after opening at ₹4,612.20, compared with Friday's closing price of ₹4,406.05.

At the time of reporting, the aviation stock was trading 3.6% higher at ₹4,565.65, valuing the company at around ₹1.77 lakh crore. The country's most valuable airline stock hit a 52-week high of ₹6,225.05 on August 18, 2025, and a 52-week low of ₹3,894.80 on March 23, 2026.

IndiGo shares have declined around 10% so far in calendar year 2026 and over 14% in the past year. However, the stock has gained more than 7% over the last month.

Q4 performance in line with estimates

InterGlobe Aviation reported a consolidated net loss of ₹2,536.9 crore in the March quarter (Q4 FY26), compared with a profit in the year-ago period, as a sharp rise in foreign-exchange losses, exceptional charges, and higher operating costs outweighed modest revenue growth.

Revenue from operations rose 1.3% year-on-year to ₹22,438.4 crore, while total income increased 3.2% to ₹23,830.7 crore. However, total expenses surged 30.1% to ₹25,932.5 crore, resulting in a pre-tax loss of ₹2,351.7 crore.

The airline's operating performance was hit by a steep increase in forex losses. Net foreign-exchange loss stood at ₹4,822.9 crore during the quarter, against a gain of ₹136.6 crore in the corresponding period last year. The company also incurred exceptional charges of ₹249.9 crore related to the implementation of new labour codes and operational disruptions in December 2025, including customer compensation, travel vouchers, a DGCA penalty, and associated costs.

EBITDAR plunged 68% year-on-year to ₹2,227.8 crore from ₹6,948.2 crore, while the EBITDAR margin contracted sharply to 9.9% from 31.4%.

According to analysts, EBITDA excluding forex losses declined only about 5% year-on-year to ₹5,630 crore, while the reported net loss of around ₹2,660 crore was lower than expectations, aided by a 46% jump in other income driven by currency-hedging gains. Passenger yields remained stable, with revenue per available seat kilometre (RASK) rising 1% year-on-year to ₹5.3. Fuel cost per ASK declined 5% from a year ago, partly offsetting cost pressures.

Analysts remain bullish on resilient demand

While IndiGo's March-quarter earnings were broadly in line with expectations, brokerages remained positive on the stock, citing resilient demand, strong pricing trends, easing aircraft groundings, and long-term growth opportunities in international operations.

Motilal Oswal reiterated its 'Buy' rating with a target price of ₹5,600 after raising its FY27 and FY28 EBITDAR estimates by 5% and 2%, respectively, on expectations of better cost control. The brokerage expects a gradual normalization of international operations, easing Pratt & Whitney engine-related aircraft groundings, fleet expansion led by A321XLR aircraft, and sustained demand to support earnings recovery.

The brokerage acknowledged near-term challenges from Middle East airspace disruptions, elevated fuel costs, rupee depreciation, and higher damp-lease exposure, but remains confident in IndiGo's long-term growth strategy.

Emkay Global maintained a 'Buy' rating but lowered its target price to ₹5,200 from ₹5,500. The brokerage expects near-term margins to remain under pressure as higher operating costs have not been fully passed on to passengers. It reduced its FY27 EBITDA estimate by 9% and FY28 estimate by 2% due to assumptions of lower yields and higher fuel costs. However, it believes that a recovery in aircraft utilization and an improvement in the geopolitical environment could drive earnings growth.

JM Financial retained an 'Add' rating with a target price of ₹5,000, highlighting management's guidance for mid-teen passenger revenue growth and 3-4% capacity expansion in the first quarter of FY27. The brokerage expects international capacity to normalize by the end of June 2026, removing a key operational overhang. It also noted that aircraft-on-ground (AOG) levels are expected to decline from the current 40-plus range to the 30s by year-end, improving fleet utilization.

Elara Capital also remains bullish, reiterating its 'Buy' call with a target price of ₹6,020. The brokerage believes the market is largely pricing in higher crude oil prices and rupee weakness but is underestimating the positive impact of strong airfare trends. It expects supply constraints and disciplined capacity additions to keep fares elevated, supporting profitability despite higher fuel costs.

IndiGo ended FY26 with a fleet of 441 aircraft, including 20 damp-leased aircraft compared with 16 in the previous quarter. The airline maintained a strong liquidity position, with total cash of ₹51,700 crore and free cash of ₹36,200 crore at the end of March 2026. Core gross debt remained largely unchanged sequentially at ₹24,300 crore.

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