IndiGo: Nomura flags uncertainty over airfare rules, retains 'Buy' with Rs 6,000 target
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- ✓Nomura kept a 'Buy' rating on InterGlobe Aviation with a Rs 6,000 target on October 17.
- ✓The brokerage said visibility remains low on new airfare rules expected within two weeks.
- ✓Nomura noted, "A minimum and maximum airfare band remains uncertain." Shares of IndiGo fell 0.16% to Rs 4,679.30 on October 19.
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- India Economy
Nomura has maintained its 'Buy' rating on InterGlobe Aviation with a target price of Rs 6,000, saying visibility remains low on the new airfare rules that the government is expected to notify within two weeks. According to a news report on proceedings related to petition, the government would notify new rules related to airfares under the Bharatiya Vayuyan Adhiniyam, 2024, within two weeks. "Overall, we think visibility remains low on the new rules. Nevertheless, our base case is higher oversight/transparency on the margin on airfares and stronger disclosures related to fares/ancillary components rather than direct government intervention," Nomura said in a note dated October 17.
The brokerage's base-case assumptions for FY28 factor in yields remaining largely flat, down 2% year-on-year, while Singapore jet fuel prices decline 13% year-on-year as geopolitical conditions partly normalise.
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