IndiGo share price gains for 12 straight days, its longest winning streak
As of December 13, the stock has been on an upward trajectory for the twelfth consecutive day, setting a new record for continuous gains, surpassing its previous record of 11 straight days of positive movements.
During intra-day trading on this day, the stock rose as much as 2.5 percent, reaching a new all-time high of ₹3,006.90. It has now soared 66 percent from its 52-week low of ₹1,810.45, hit on March 28, 2023.
In these 12 consecutive trading sessions, the airline stock has advanced by 17 percent. This remarkable performance suggests a strong and sustained positive trend, attracting investor interest and potentially reflecting positive sentiment toward the company. Investors and market participants will likely continue to monitor the stock’s performance in light of its recent record-breaking streak.
The surge in IndiGo shares is attributed to a sharp decline in crude oil prices, which fell more than 4 percent on December 12. Brent Crude, a global benchmark, is now close to $73 a barrel, a level last seen in March 2023. This decline in oil prices is particularly significant for airlines, including IndiGo, as jet fuel costs constitute nearly 40 percent of the total expenses.
The relief from lower fuel costs has positively impacted not only IndiGo but also other airlines in the industry, including SpiceJet, Air India, and Akasa.
The stock has also rallied over 42 percent in the last 1 year and almost 50 percent in 2023 YTD giving positive returns in 8 of the 12 months till date. It has risen 10 percent in December so far extending gains for the 3rd straight month since October. Between Oct-Dec, it has surged over 26 percent. It rose the most in May, up 17.4 percent and shed the most in February, down 12.6 percent.
Meanwhile, brokerage house Kotak Institutional Equities, in its note dated December 1, has maintained a ‘buy’ rating on InterGlobe Aviation and raised its price target to ₹3,300 per share. The brokerage firm anticipates that higher yields are likely to persist for an extended period, maintaining capacity constraints. Despite the increased pricing gap between airlines and railways over the last three years, customers have not significantly shifted to the lower-cost AC rail option.
Kotak expects the earnings per share (EPS) for InterGlobe Aviation to be ₹175.2 in FY25E and ₹198.5 in FY26E. The positive stance on IndiGo is attributed to the sustained upside risks to yields for FY25.
This analysis reflects Kotak’s optimistic outlook on the airline industry, especially for IndiGo, considering the expected continuation of favorable pricing dynamics and potential growth in earnings. Investors may find this information valuable in evaluating investment decisions related to InterGlobe Aviation’s stock.
Technical View by Axis Securities
Interglobe Aviation (IndiGo) | Buying range: ₹2,840-2,783 | Target price: ₹3,034-3,150 | Stop loss: ₹2,700
IndiGo has broken out above the rounded bottom pattern at the ₹2,745 level, signifying the continuation of a medium-term uptrend.
The stock has broken out with a breakout gap, indicating positive momentum. It has successfully closed the above-the-upper weekly Bollinger band, generating a buy signal.
The stock is forming a higher high-low formation on the weekly chart and holding above an upward-sloping trendline, indicating positive momentum.
The weekly strength indicator RSI is in a bullish mode and holding above its reference line, indicating positive bias.
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 decisions.
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Published: 13 Dec 2023, 02:16 PM IST
