IndiGo shares still under pressure after price rise in aviation turbine fuel The IndiGo stock has remained a stock in focus in the past trading sessions amid concerns about the impact of a rise in aviation turbine fuel (ATF) prices on the profitability of the airlines. In fact, high fuel prices may weigh on airlines and could have implications for second-quarter earnings. Despite these concerns, domestic brokerage ICICI Securities has maintained a ‘Buy’ call on the InterGlobe Aviation, the parent company of IndiGo, with an unchanged target price of ₹6,020 per share.
In their latest update, Indian brokerage ICICI Securities is betting on IndiGo’s dominant market position, pricing power, and long-term growth trajectory even as the IndiGo share price continues to trade under pressure on account of elevated fuel costs, one of the biggest operating costs for airlines.
Why domestic brokerage ICICI Securities is bullish on IndiGo stock
In an interaction with The Indian Express earlier, ICICI Securities noted that the recent fall in IndiGo shares presents a “good opportunity for long-term investors”. Even though the brokerage has lowered its FY27 earnings estimates on the back of an extended period of high ATF prices, its broader investment thesis on the airline has remained unchanged. The brokerage expects the elevated fuel costs to impact the September-ending quarter and also the December-ending quarter based on current trends. The strong passenger demand and its pricing power, ICICI Securities believe, can help buffer the rising operating costs.
Passenger yields saw significant growth in the September quarter. For the September-ending quarter, The airline indicated Further yield growth The increase in yields suggests that airlines might possess some pricing leverage with increasing demand for air travel.
IndiGo’s ATF price risk remains a major concern
Rising prices of aviation turbine fuel (ATF) in India are the biggest near-term threat to IndiGo shares. The country saw yet another increase in the price of aviation fuel in September for the second consecutive month, with the prices of ATF rising 5.46% to ₹121.28 a litre from ₹115. In addition, there were two hikes announced back to back in the ATF price in August (first July and the second in August). Jet fuel’s price stands at ₹121.28 in metro cities. With a jet fuel’s cost is 35%–40% of the airlines total operating cost. Hence, the ATF prices will continue to put pressure on margins of airlines.
The large scale, extensive route network and cost-efficient operation, have always proved beneficial for theairline. Also India has a large network of low-cost carriers which provide them an extra leverage to adjust the fares during demand and supply pressure.
IndiGo, also benefits from its massive domestic market share. From March 2026 to July 2026 , the market share of IndiGo has constantly grown from March of FY2026 [65%] , April FY2026[65%], May FY2026 [64.9%] to June FY2026 [66.3%] and FY2026 July [67.4%], Whereas, in its International Market share , there was a slight decrease of 4.6% , from 54.7% in JuneFY2026to50.1% in JulyFY2026 because of restore International operations by Air India.
However, the month-on-month Domestic available seat kilometre(ASK)Growth has dropped and also the month on Month International Available seat Kilometers (ASK) Growth improved due to month-on month changes. But at end of the day IndiGo remains having a strong presence in the Domestic sector.
IndiGoQ2 results anticipation
Investors in the domestic market are closely tracking the September-quarter results of IndiGo to understand the impact of soaring ATF prices on its performance. ICICI Securities anticipates the current quarter would continue to feel cost pressure due to sticky high ATF costs, although higher passenger fares and consistent air travel demand would offer some cushioning effect. It expectsRevenueperAvailableSeatKilometre(RASK)at ₹5.74inFY2026and ₹5.54inFY2028. For now the burning question for investors is how IndiGo will be able to manage in Q32026and sustain pricing ability on the non-fuel cost structure.
IndiGo’s 2030 growth prospects
Looking beyond the current scenario, ICICI Securities is bullish about the company’s expansive plans. The airline aims to grow its annual capacity, reaching approximately 300 billion Available Seat Kilometres (ASKs) by 2030, and carry more than 20 crore passengers. This growth should lead to stronger earnings for the airline if air travel demand continued to surge. Fueled by an increasing middle class and growth in air travel demand (both international and domestic), India’s airline industry presents compelling opportunities.
IndiGo target price stands at ₹6,020
ICICI Securities has a buy rating on IndiGo shares with an target of₹6,020. The brokerage values the airline at 25 times FY28 earnings of Rs241 per share post considering full tax on revenue. Although the brokeraages has fact redincrements in geopolitics, oil prices and any other operating risks to this Valuation. However, in its opinion, strong market position of IndiGo, its scaleand size give it a significant buffer against these threats. Should you buy indiGo shares? The outlook for IndiGo shares seems bifurcated due to concerns overrising ATF Prices, even though IndiGo stock maintains a strong market position, domestic demand for air travels remains robust and the airline’sgrowth projections appear promising. Investors could consider buying indiGo shares,but with caution; keeping a close watch on ATF Prices, and the airline’s future earnings performance should also be done.
