IndiGo share price: Should you buy this airline stock amid falling crude oil prices? Experts share 4 investment rational

InterGlobe Aviation (IndiGo share price) has recently captured the attention of analysts, especially given the airline's global expansion and the favorable crude oil prices. Experts believe that Indigo has been on a growth path post-Covid, increasing its market share in the domestic sector, broadening its international and cargo operations, introducing new destinations/routes, establishing codeshare agreements, and receiving aircraft deliveries from OEMs.

These elements have allowed the company to sustain profitability over the past two years and are expected to continue propelling its success in the future, according to analysts.

Brokerage firm Motilal Oswal Financial Services has upgraded its rating on the airline stock to 'buy' and has established a target price of ₹6,550. Similarly, Axis Securities has also assigned a 'buy' rating to the stock, with a target price set at ₹5,800.

Investment Rationale

Spreading Wings Globally

According to a report by Axis Securities, Indigo’s international travel includes countries across Southeast Asia, the Middle East, CIS nations, and some European locations. The airline is aiming to broaden its travel routes and networks towards more European countries. Indigo has initiated its direct long-haul flights to Manchester and Amsterdam, as well as mid- and short-haul flights to various other European destinations.

The recent acquisitions of a new A321XLR fleet will allow the airline to reach long-haul destinations, enhancing its coverage in European countries. The expected deliveries by CY27 will significantly boost their ability to expand transcontinentally and enable them to compete with other major global airlines.

Upswing in Indian aviation

According to a report by Motilal Oswal, India's aviation industry is experiencing robust growth, with domestic passenger traffic anticipated to double by the calendar year 2030. India is rapidly emerging as a significant player in the international air travel market, with projections indicating it will rank as the 5th largest outbound tourism market by the calendar year 2027.

The Indian government has pledged to invest USD 25 billion in the expansion and modernization of airports by the calendar year 2027. With the number of operational airports having increased twofold over the past decade, enhanced infrastructure is conducive to Indigo's long-term growth prospects.

Lower Crude

Additionally, Motilal Oswal's report indicates that it has reduced its Brent price forecast for FY26-27E to USD65 per barrel (down from USD70 per barrel), influenced by several factors. These include the expected gradual easing of OPEC+ voluntary cuts starting in April 2025, along with IEA's prediction that global supply is anticipated to surpass demand, leading to an increasing demand-supply gap as these cuts are unwound. For Indigo, fuel costs represent approximately 40% of total expenses; hence, lower crude oil prices are advantageous for the company.

Capacity Investments

As per Axis Securities, Indigo presently possesses one of the largest order books with Airbus, which includes the delivery of over 950 aircraft (including the longer-range A321XLRs and A350-900 models) from calendar year 2025 to 2035. The airline aims to acquire an additional 600 aircraft by the end of calendar year 2030, equating to approximately 50 deliveries per year, or nearly one aircraft each week. Furthermore, supply chain challenges facing Boeing, the primary supplier for Air India, would offer a beneficial edge.

IndiGo share price

IndiGo share price today opened at ₹5,260.90 apiece on the BSE, the stock touched an intraday high of ₹5,282.40, and an intraday low of ₹5,212 per share.

Anshul Jain, Head of Research at Lakshmishree Investment and Securities, stated that IndiGo has broken out of a 30-week bullish rectangle at ₹5,151 on the weekly chart, but the breakout lacks strong volumes and bullish candle confirmation. This makes it a weak breakout. While aggressive traders may consider buying on a pullback to the breakout level, fresh longs should ideally wait for more evidence—like volume expansion or bullish follow-through—to confirm trend strength before entering. Caution is advised despite the breakout structure.

Disclaimer: The views and recommendations above are those of individual analysts, experts and broking companies, not of Mint. We advise investors to check with certified experts before making any investment decision.