Incred has ‘Reduce’ rating on IndiGo and 3 other stocks. Take a look – Out of Favour

Valuation: We have a REDUCE rating on the stock with a target price of Rs.2,000, valuing it at 8.5x FY26F EV/EBITDAR, vs. median multiple of 8.8x (Nov 2015 to now, excluding the Covid-19 pandemic period). We believe the slight discount is warranted as (a) the time for resolution of grounded fleet is uncertain, (b) we expect IndiGo’s ASK to grow in line with the industry vs. higher earlier, and (c) a reduction in the gap in RASK-CASK between IndiGo vs. Air India/Vistara over FY20 till now.