INDIGO - Fundamental Analysis: Financial Health & Valuation

Last Updated Time : 19 Sept 25, 2:16 pm

🧠 My Thought Process

You're asking for a full-spectrum fundamental analysis of InterGlobe Aviation Ltd (INDIGO), with a numeric rating and strategic investment guidance. I’ve weighed profitability, capital efficiency, valuation, and business durability, and factored in recent analyst targets, index inclusion forecasts, and technical indicators as of September 2025.

📊 Fundamental Analysis of INDIGO

🔍 Core Financials

Profitability

PAT Qtr: ₹2,161 Cr vs ₹3,073 Cr — sequential decline, but YoY performance remains strong.

EPS: ₹173 — robust, driven by operational leverage and cost efficiency.

ROE: 104%, ROCE: 17.3% — exceptional shareholder returns, reflecting asset-light leasing model and strong margins.

Leverage & Liquidity

Debt-to-equity: 7.21 — high, typical for aviation due to aircraft leasing; manageable given consistent cash flows.

Dividend Yield: 0.17% — minimal, reinvestment-focused.

Cash Flow & Stability

Strong free cash flow and consistent profitability.

Inclusion in Nifty50 index expected by September 30, 2025, driving passive inflows of ~$507 million

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📉 Valuation Indicators

Metric Value Interpretation

P/E Ratio 33.1 Fairly valued vs industry PE of 33.1

P/B Ratio ~23.8 High — reflects premium on brand and earnings power

PEG Ratio 0.78 Attractive — growth justifies valuation

Intrinsic Value ~₹5,900–₹6,200 Slight upside from current price

✈️ Business Model & Competitive Edge

Segment Focus: Domestic and international passenger air travel.

Moat: Largest airline in India by market share; cost-efficient fleet, strong brand, and high load factors.

Growth Drivers

Fleet expansion and international route additions.

Strong demand recovery post-COVID and premium pricing power.

Analyst consensus target: ₹6,168–₹6,900, with multiple brokers maintaining “Buy” ratings

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📈 Technical & Entry Guidance

Current Price: ₹5,728

DMA 50/200: ₹5,763 / ₹5,251 — trading near short-term support.

RSI: 45.4 — mildly oversold.

MACD: -42.6 — bearish crossover.

🎯 Entry Zone

Ideal Buy Range: ₹5,600–₹5,700 — near DMA 50 and RSI support.

Stop Loss: ₹5,400

Target: ₹6,300–₹6,600 in medium term

🕰️ Long-Term Holding Outlook

Hold if invested: Strong fundamentals, index inclusion, and fleet growth support long-term value.

Buy on dips: Preferably near ₹5,650 zone.

Growth Triggers: Nifty50 entry, international expansion, and margin improvement.

⭐ Fundamental Rating

4.4

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economictimes.indiatimes.com

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trendlyne.com

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