With $23 billion market cap, India's IndiGo becomes world's most valuable airline

Budget carrier IndiGo has pulled off a rare milestone, becoming the most valuable airline in the world for a brief period, powered by a strong stock rally over the past few months. The company's market capitalisation is currently around Rs 2 lakh crore ($23.3 billion), which is higher than that of Delta Airline and Ryanair Holdings, as of Tuesday's close.

Shares of IndiGo gained as much as 13% so far this year, even as the broader Indian market suffered a slump due to external uncertainties. For instance, the Nifty index is down about 6% this year.

IndiGo is one of the most efficient low-cost air carriers with a market share of 62% in the Indian aviation sector. The improvement in financial performance was a key driver in the stock's strong performance. The company has faced several challenging financial periods after the Covid days. The most recent one occurred in Q2FY25, when the airline reported a net loss of Rs 987 crore.

Analysts believe IndiGo should benefit from a better-than-expected combination of fares, crude, PLF to post a strong fourth quarter PAT of Rs 2300 crore and ultimately enabling PBT (ex-forex) of Rs 8600 crore in FY25E.

"We have been structurally positive on the company driven by business moats of cost competitiveness, robust orderbook and strong balance sheet but profitability has been strong, also aided by favourable supply-demand situation which should continue in FY26," said ICICI Securities.

IndiGo expects early double digit ASK rise in FY26. The company had 439 planes of which 50 are grounded and in FY26, about 50 new planes are likely to be added.

The airline, in its recent analyst meeting, said it further expects the international segment to be its major growth driver over the next five years. The company expects 40% of its FY30 ASK from the international segment, up from 28% in FY25F.

To strengthen its global brand awareness, IndiGo’s management has implemented preemptive measures aimed at capturing a larger share of international market growth in the coming years.

The airline is also focused on enhancing international travel services and continuously adjusting schedules to improve customer experience.

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