Shares of Interglobe Aviation, the operator of IndiGo, dipped by over 5% on Thursday, as leading brokerages expressed scepticism about the company’s ability to maintain its performance from the June quarter.

Indigo Q1 Performance: IndiGo reported a net profit of ₹3,091 crore for the quarter ending in June, contrasting sharply with a loss of ₹1,064 crore the previous year. The company’s operational revenue saw a 30% year-on-year increase to ₹16,683 crore.

Long-term fundamentals remain solid, however, the upcoming Cricket World Cup 2023 in Q3 is keenly anticipated.

What do analysts say? After IndiGo’s Q1 results announcement on Wednesday, Morgan Stanley lowered its stock target, while domestic brokerage Motilal Oswal chose to stay ‘Neutral’, but Nuvama recommended a ‘Buy’, raising the price target.

Morgan Stanley reduced the target price of Interglobe Aviation stock to ₹2,600 due to a weak Q2 outlook, despite maintaining a ‘Buy’ rating. It suggested that despite Q1 earnings meeting expectations, IndiGo could potentially see a loss in Q2.

Nuvama kept a ‘Buy’ on IndiGo, increasing the target price to ₹2,907, citing higher passenger load and capacity.

Despite a positive industry outlook, Motilal Oswal highlighted challenges like a grounded fleet that the airline needs to tackle. It gave a ‘Neutral’ stance with a price target of ₹2,360.

Price Action: Interglobe Aviation Ltd. shares were down 4.42% at ₹2,451.95 on Thursday shortly before markets closed.

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