Interglobe Aviation, operator of IndiGo airlines, share price is finally trading in green, snapping a seven-day losing streak. IndiGo stock was trading marginally up around 0.23% on Tuesday, December 9.
IndiGo stock crashed nearly 9% on Monday, marking as worst single-day drop since February 2022. The aviation stock has cracked over 13% in the past five sessions.
The multibagger aviation stock crashed after a recent surge in widespread flight cancellations. This has led to a massive reduction in its market capitalisation from ₹2,40,637.92 crore to ₹1,87,379.08 crore, indicating a loss of ₹53,258.84 crore in its valuation. IndiGo’s crisis has dealt a significant blow to both investors and travellers.
How will ongoing flight disruptions impact Indigo stock and future earnings?
Credit rating agency Moody’s Ratings said on Monday that InterGlobe Aviation Ltd (IndiGo) is likely to face negative credit impacts because of insufficient planning and poor readiness for regulatory changes.
The rating agency further said that IndiGo’s recent operational issues revealed weaknesses in planning, supervision, and resource management, which may lead to revenue losses due to cancellations, customer refunds, compensation, and possible regulatory fines.
“We have downgraded IndiGo’s issuer category score for human capital to 4 from 3, reflecting the adverse impact of slower hiring on the airline’s operations. Although IndiGo does not have employee unions, its pilots, through broader pilot associations in India, possess significant collective bargaining power,” the agency said.
Meanwhile, brokerage firm JM Financial anticipates an 8-9% earnings hit in FY26 if the situation lasts for a total of 15 days. “In the near-term, we estimate a 4% dip in our ASK for 3QFY26 ASK assuming an average ~25% ASK cut over a period of 15 days during the quarter. Consequently, we assume 8-9% earnings hit to our FY26 estimates if the situation lasts for a total of 15 days, with 5 days already done (not including the penalty amount).”
IndiGo share price: Should you buy or sell?
JM Financial maintains its ‘reduce’ rating on the IndiGo stock, saying that even as the FY26 earnings hit has been priced in, the stock is yet to price in the structural cost increase driven by regulatory actions, one-time penalty, and management change, if any.
According to Anshul Jain, Head of Research at Lakshmishree, Indigo broke below its 5505 rectangle support and quickly met the primary target near 5035 after posting an intraday low of 4842.5. The drop has pushed the stock into deeply oversold territory on lower timeframes, so a relief bounce toward 5200 is possible as short-term pressure unwinds.
“That said, the broader structure on daily, weekly, and monthly charts has taken a clear hit. Trend alignment has turned negative, and participation on down days shows control shifting to sellers. Unless the stock reclaims the broken base with strength, the risk path stays lower with a slide toward the 4000 zone, now a high probability setup,” Jain said.
Disclaimer: This story is for educational purposes only. The views and recommendations above are those of individual analysts or broking companies, not Mint. We advise investors to check with certified experts before making any investment decisions.
