Soaring to New Heights! Can Indigo Defy Expectations and Continue its Rise Amidst Stake Sale by Gangwal Family?
Based on the information provided, here is a summary of the key points regarding Interglobe Aviation Ltd. (IndiGo):
Share Performance: On June 12, shares of Interglobe Aviation fell by 2.75 percent due to news of the Gangwal family offloading a 5-8 percent stake in the company. Despite this, the stock price has remained stable and is up 17 percent so far in the year.
Gangwal Family Stake: As of March end, the Gangwal family held a 16.2 percent stake in the airline. They have been steadily reducing their stake since a rift between the co-founders, Rakesh Gangwal and Rahul Bhatia, emerged.
Positive Factors: Stable crude prices and issues faced by competitors GoAir and SpiceJet have contributed to a positive sentiment for Interglobe Aviation. The airline reported a second consecutive quarterly profit of Rs 919 crore in the quarter ended March 2023. Indigo's revenue from operations also grew significantly by 76.5 percent year-on-year.
Analyst Outlook: Analysts are optimistic about the stock's performance and believe it can gain further. The stock has 21 buy, 3 hold, and 2 sell calls on it, with target prices reaching as high as Rs 2,700.
Market Share: According to data from the Directorate General of Civil Aviation (DGCA), IndiGo's market share increased from 56.8 percent in March to 57.5 percent in April. In comparison, SpiceJet and Go First saw declines in their market shares during the same period.
Mutual Fund Stake: Mutual funds have been increasing their stake in Interglobe Aviation, with their holdings rising from 6.23 percent in December 2022 to 8.58 percent by May 2023.
Overall, despite the periodic selling of shares by the Gangwal family, positive factors such as stable crude prices, strong financial performance, and market share growth have contributed to an optimistic outlook for Interglobe Aviation and its stock.