IndiGo shares resume decline after a day's pause; here is why the stock is falling

Shares of InterGlobe Aviation, the parent of country's largest airline IndiGo, fell for a sixth straight session on Friday, barring a pause in the previous session. IndiGo shares have dropped as much as 11.44% in the last six trading session and in intraday deals the stock fell as much as 2.92%. The stock had touched its fresh 52-week low of ₹4,293 on Wednesday, March 4.

IndiGo shares came under selling pressure ever since it suspended its flight operations in Middle East.

IndiGo suspended its flights operating in Middle East after geopolitical tensions flared up last week when United States and Israel attacked Iran leading to counter strikes from Iran across various countries in the Middle Eastern region.

Earlier this week, IndiGo informed exchanges that owing to airspace restrictions over Iran and Middle East it cancelled more than 500 flights to the Middle East and select international destinations have been cancelled between February 28, 2026 and March 3, 2026.

"Our operational teams are continuously assessing the evolving regional developments, recalibrating flight schedules, and planning repatriation operations in coordination with relevant authorities in India and the respective international jurisdictions, with the objective of minimizing disruption to passengers," IndiGo had said in a regulatory filing.

Global investment bank JPMorgan in a note said that it remains cautious on IndiGo as it believes that IndiGo should continue to face headwinds from fuel and non-fuel costs and there is limited scope to raise yields as domestic air traffic remains tepid and international is also moderating.

Jet fuel prices had begun to rise in February even before latest US-Iran conflict started, and non-fuel costs should remain elevated due to continued weakness in the rupee, JPMorgan said.

Domestic air traffic industry growth slowed from 4.4% YoY in January and 0% in February, while international traffic growth came in at 6.5% and 2% YoY in January and February respectively.

JPMorgan has cut its FY26 and FY27 EPS by estimate by 13% and 14% respectively to account for higher fuel costs and it expects oil prices to moderate in FY28 leading to a modest EPS cut of 4%.

Another global investment bank UBS said that ongoing conflict could weigh on airlines' Available Seat Kilometres (ASK) in the near term and rising crude poses additional earnings risk.

Rupee weakness versus dollar poses medium-term headwinds and UBS expects these headwinds to begin impacting earnings in Q4FY26, warranting a more conservative near-term valuation.

That said, IndiGo's long-term investment case remains intact, with industry downturns historically favouring efficient players, UBS added.

As of 11:02 am, InterGlobe Aviation shares traded 2.3% lower at ₹4,409.50. The stock was among the top losers in the NIFTY50 index.

IndiGo Q3 earnings

IndiGo in January reported net profit of ₹550 crore in the third quarter of current financial year (Q3FY26), marking a decline of 77% form ₹2,449 crore in the same period last year. The sharp decline in profit came on account of exceptional expense of ₹1,546 crore in October-December period.

The exceptional expense included ₹969 crore set aside for implementation of new labour codes and ₹577 crore for operational disruptions it faced in December, IndiGo said in a regulatory filing.

IndiGo's revenue from operations rose 6% to ₹23,472 crore from ₹22,111 crore in the year-ago period.