Despite the meltdown, some of the biggest brokerages remain optimistic about the airline’s structural strength, maintaining their ‘Buy’ ratings and citing long-term cost advantages, market dominance, and operational recovery plans as reasons to stay constructive.
However, the technical indicators present a contrasting view, with analysts pointing to a clear breakdown in chart structure and a decisive shift into bearish territory. With the stock trading well below key moving averages and hovering near critical support levels, momentum currently favours the sellers.
This divergence between fundamental conviction and technical weakness has left market participants closely watching whether IndiGo can stabilize at current levels, or if further downside is in store.
Let’s break it down for you:
Technical view: Downtrend still dominant
Technical analysts are less optimistic about IndiGo’s immediate prospects on the charts.
Shitij Gandhi, AVP – Equity Technical Research at SMC Global Securities, noted that the stock has entered “a sharp corrective phase after breaking down from a multi-week consolidation range marked between Rs 5,550 and Rs 5,900.” According to him, this breakdown, accompanied by volume spikes, signals “strong bearish sentiment.”The stock has also fallen below its 200-day moving average of Rs 5,450, reinforcing the downside bias. Gandhi warns, “With momentum clearly favouring sellers, the price is now drifting toward the next major support zone at Rs 4,800–4,700,” which aligns with a long-term horizontal base.
On any pullback, the Rs 5,100–5,350 zone is expected to act as stiff resistance.
Additionally, Akash Shah, Research Analyst at Choice Broking, highlighted similar concerns. “The broader structure has clearly shifted into a bearish trajectory, with the price forming lower highs and lower lows – a classic sign of increasing downside momentum.”
Also read: Kaynes Technology shares now cheapest in JPMorgan’s coverage after 40% correction in a month. Time to buy?
Shah adds that the inability to reclaim even the shortest EMA reflects “continued pressure on every minor bounce.” He noted that all major EMAs have now turned downward, and that the 100-day EMA on the weekly chart also coincides with the Rs 4,700 zone, reinforcing it as a critical structural support.
“If a breakdown occurs below this cluster,” Shah warns, “it could accelerate weakness toward the Rs 4,550–4,500 zone.”
On the upside, the next major resistance lies at Rs 5,200–5,250, where a prominent unfilled gap is visible. “Only a decisive move above this gap zone would signal meaningful strength or a potential trend reversal,” he added.
Fundamental outlook: Temporary headwinds, but core story intact
While technical analysts are not very positive on the near-term prospects of the stock, the fundamentals suggest a case for resilience.
IndiGo, operated by InterGlobe Aviation, has been navigating a turbulent patch marked by over 11,000 flight cancellations this fiscal, operational disruptions, and regulatory scrutiny.
HSBC Global Investment Research, however, downplayed the long-term damage. “IndiGo faces major headwinds but no structural damage,” the brokerage said, adding that “given its continued cost advantage and muted capacity growth at its peers, we don’t see any structural damage for IndiGo.”
While HSBC has lowered its target price from Rs 6,920 to Rs 5,977 to account for near-term disruptions, it has retained a ‘Buy’ rating on the stock. According to the firm, IndiGo has cancelled flights worth Rs 12–14 billion in lost revenue and Rs 3–5 billion in profit. EBITDA estimates for FY26 and FY27 have been trimmed by 4% and 5%, respectively.
Much of the strain comes from the new pilot duty norms imposed by the Directorate General of Civil Aviation (DGCA), which include stricter limits on weekly rest, night duty, and landings. HSBC stated that “IndiGo, because of its high aircraft utilisation and ultra-lean cost structure, has taken the sharpest hit.”
Still, HSBC maintains confidence in the airline’s recovery, citing that “its cost advantage remains unmatched, peers are not expanding aggressively, and network depth is still a moat.”
Further, domestic brokerage firm Emkay Global echoed similar optimism.
While acknowledging “IndiGo’s ongoing operational disruption,” the brokerage has retained its Buy rating with a target price of Rs 6,300 — representing a potential upside of 28.6% from the recent price of Rs 4,898.95.
The brokerage said, “IndiGo is targeting normalization from December 10,” while cautioning that the situation “remains fluid, with the DGCA probe underway and further regulatory action pending.”
Emkay highlighted that the operational reset, which involved the cancellation of over 1,600 flights on December 5 alone, had a cascading impact on operations. Nevertheless, the brokerage retained its previous guidance of a 12–13% YoY growth in ASK (Available Seat Kilometers), with RPK (Revenue Passenger Kilometers) seen at 11–12%.
While recent volatility could moderate PRASK (Passenger Revenue per ASK) guidance, Emkay remains constructive, citing “IndiGo’s strong positioning in the Indian aviation market and the expectation of operational normalization post-crisis.”
Also read: Rs 37,000 crore gone in 6 days! Can IndiGo shares make a comeback?
(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of The Economic Times)
