Aviation shares in focus; IndiGo hits record high, SpiceJet soars 7%

InterGlobe Aviation, the parent firm of IndiGo airlines, hit a 52-week high at Rs 2,155 and has rallied 9 per cent on the BSE in intra-day trade on hopes of positive future prospects.

InterGlobe Aviation, the parent company of IndiGo Airlines, hit a 52-week high of Rs 2,155, putting aviation stocks in the spotlight. The stock has risen 9% on the BSE in the intraday session on Friday, surpassing its previous high of Rs 2,023.60 set on September 15, 2021.

SpiceJet, India’s second-largest private airline, saw its stock rise 8% to Rs 81.95 on significant trading activity. The counter’s trading volume more than tripled, with a total of 15 million equity shares changing hands on the NSE and BSE. The S&P BSE Sensex, on the other hand, was up 0.95 percent at 59,702 at 10:55 a.m.

Indigo, as a disciplined price leader, is well-positioned to gain from healthy spreads beginning in 4QFY22. The brokerage company updated its stock with a ‘buy recommendation and a target price of Rs 2,400 per share, citing its strategy of matching the lowest fares, as well as its robust cash balance and the aftermath of Covid on peer’ balance sheets, as reasons for the sector’s long-term spreads.

With the relaxation of travel and shutdown regulations in India, demand for air travel has increased. According to the DCGA, around 6.7 million domestic passengers flew in August 2021, up 33.83 percent from the 5 million who passed in July 2021.