IndiGo shares slump as flight disruptions deepen, brokerages trim targets

InterGlobe Aviation, the parent company of IndiGo, saw its share price fall nearly 7 per cent on Monday, continuing a losing streak that has stretched into a seventh trading session. The stock touched Rs 5,001 in morning trade, the lowest level recorded in seven months, as the airline struggles to stabilise operations and restore passenger confidence.

The sustained slide has prompted caution from brokerages, several of which have cut target prices while maintaining their ratings.

Cancellations drag on for a sixth day

Flight cancellations continued across the network on Monday, sparking disruption at major airports. Delhi airport issued a public advisory in the early hours, warning that schedules remained volatile as the airline attempted to bring services back on track.

More than 2,000 domestic and international flights have been scrapped in the past six days. The Directorate General of Civil Aviation has issued a show-cause notice to IndiGo chief executive Pieter Elbers, citing “significant lapses in planning, oversight and resource management” and alleging non-compliance with regulations.

The regulator said the airline failed to adequately prepare for the revised Flight Duty Time Limitation (FDTL) norms, which came into force last month. The tighter rules require longer rest periods and humane rosters for crew, particularly pilots. IndiGo has been grappling with a surge in crew requirements as a result, at a time when its capacity was expanding and operational issues were already mounting.

UBS: long-term potential intact, near-term costs rising

UBS retained its ‘Buy’ recommendation but lowered its target price to Rs 6,350 a share, indicating an upside of more than 18 per cent from the previous close. The brokerage said the airline was caught off guard by the FDTL changes and has had to revise cost projections for FY26 to FY28 to account for additional crew and rupee depreciation.

Despite the turbulence, UBS said IndiGo’s long-term growth story remains strong, buoyed by its international expansion plans. It noted, however, that further currency weakness or unforeseen operational penalties could weigh on performance.

Jefferies: disruption coincided with expansion

Jefferies also maintained a ‘Buy’ rating, setting its target price at Rs 7,025, nearly 31 per cent above the last close. The brokerage said IndiGo had been hit harder than rivals as new FDTL rules cut pilot duty hours just as the airline was ramping up capacity, dealing with congestion and facing technical issues. The combination had triggered a cascading operational crisis.

IndiGo is now adjusting its network and expects schedules to stabilise by mid-December, though Jefferies warned that higher crew costs and disruption-related expenses will linger.

JM Financial: management missteps and regulatory risks

JM Financial took a more cautious view, maintaining a ‘Reduce’ rating with a target price of Rs 5,570. The firm said the wave of cancellations stemmed from the immediate impact of FDTL norms, compounded by challenges arising from an Airbus software upgrade.

The brokerage said the DGCA notice and any potential one-off penalty could further weigh on performance. It estimated that an extended disruption of around 15 days could hit FY26 earnings by 8–9 per cent.

Even though some of the expected damage to earnings is already priced in, JM Financial warned that investors may not yet have factored in three key risks: structural cost increases due to regulatory pressure, a possible penalty, and any management changes.

Share price performance

IndiGo’s stock has fallen over 13 per cent in the past five sessions, 10 per cent in a month, and more than 12 per cent in six months. Despite the latest slide, the shares are still up nearly 9 per cent in 2025. The airline is currently trading at a price-to-earnings ratio of around 31.

With agency inputs