INDIGO - Fundamental Analysis: Financial Health & Valuation
Back to ListFundamental Rating: 4.1
| Stock Code | INDIGO | Market Cap | 1,66,080 Cr. | Current Price | 4,295 ₹ | High / Low | 6,232 ₹ |
| Stock P/E | 36.6 | Book Value | 220 ₹ | Dividend Yield | 0.23 % | ROCE | 17.3 % |
| ROE | 104 % | Face Value | 10.0 ₹ | DMA 50 | 4,529 ₹ | DMA 200 | 4,944 ₹ |
| Chg in FII Hold | -3.35 % | Chg in DII Hold | 3.06 % | PAT Qtr | 1,912 Cr. | PAT Prev Qtr | -2,614 Cr. |
| RSI | 42.8 | MACD | 4.22 | Volume | 21,12,703 | Avg Vol 1Wk | 15,10,742 |
| Low price | 3,895 ₹ | High price | 6,232 ₹ | PEG Ratio | 0.86 | Debt to equity | 8.83 |
| 52w Index | 17.1 % | Qtr Profit Var | -21.7 % | EPS | 83.7 ₹ | Industry PE | 17.9 |
Financials: IndiGo shows strong fundamentals with ROE at 104% and ROCE at 17.3%. EPS of ₹83.7 supports profitability, while quarterly PAT of ₹1,912 Cr. reflects recovery from prior losses. Debt-to-equity ratio of 8.83 is high, indicating leverage risk.
Valuation: P/E of 36.6 is stretched compared to industry average (17.9), but PEG ratio of 0.86 suggests reasonable growth-adjusted valuation. Dividend yield of 0.23% is modest.
Business Model: IndiGo dominates India’s aviation market with cost leadership, strong fleet expansion, and operational efficiency. Competitive advantage lies in scale and market share.
Entry Zone: Attractive entry between ₹4,200–₹4,300, near current price and below 50 DMA (₹4,529). Long-term holding favorable if debt is managed and profitability sustained.
Positive
- Exceptional ROE (104%) highlights strong shareholder returns
- EPS of ₹83.7 supports valuation strength
- PEG ratio of 0.86 indicates fair growth-adjusted pricing
- Market leadership in Indian aviation ensures competitive edge
Limitation
- High debt-to-equity ratio (8.83) raises financial risk
- P/E of 36.6 is stretched vs industry average (17.9)
- RSI at 42.8 shows weak momentum
- Quarterly profit variation (-21.7%) indicates volatility
Company Negative News
- Profit decline compared to previous quarter (-21.7%)
- FII holdings reduced (-3.35%), showing foreign investor caution
Company Positive News
- Strong recovery from prior quarter loss (-₹2,614 Cr. to ₹1,912 Cr. profit)
- DII holdings increased (+3.06%), reflecting domestic confidence
Industry
- Aviation sector benefits from rising passenger demand and fleet expansion
- Industry P/E at 17.9 highlights IndiGo’s premium valuation
Conclusion
IndiGo demonstrates strong profitability and market dominance, but high leverage and stretched valuations pose risks. Entry around ₹4,200–₹4,300 offers a balanced risk-reward opportunity. Long-term investors should monitor debt management and earnings stability while benefiting from IndiGo’s leadership in the aviation sector.
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