CEO quits but IndiGo stock jumps 3%: Here's why
What's the story
InterGlobe Aviation, the company behind IndiGo, saw its shares jump by 3% in early trade today. The surge comes despite the sudden resignation of CEO Pieter Elbers. The stock was trading at ₹4,503 per share, up by 2.8%. This follows a strong performance in the previous session where it closed at ₹4,380.4 after a recovery from recent losses.
Market confidence
Brokerages retain 'buy' ratings on IndiGo stock
Despite the leadership change, brokerages such as HSBC and Jefferies have retained their 'buy' ratings on IndiGo stock. This indicates that they don't expect any major strategic shift at the airline. HSBC has set a target price of ₹5,860 per share for IndiGo stock while Jefferies has a higher target of ₹6,140 per share.
Future outlook
Elbers's departure and operational challenges
HSBC noted that Elbers's resignation was due to personal reasons and the operational disruptions in December could have contributed to this leadership change. The brokerage expects IndiGo to continue focusing on improving operational efficiency. Jefferies also emphasized Elbers's role in expanding IndiGo's international operations and starting wide-body aircraft plans. It said that leadership transitions at the airline have historically been smooth under founder Rahul Bhatia's oversight, who has now taken interim charge as CEO.
Operational hurdles
Leadership change amid challenging times for IndiGo
The leadership change comes after a challenging period for IndiGo. The airline faced major operational disruptions in December due to stricter flight duty time limitation rules and crew scheduling issues. This resulted in around 4,500 flight delays and cancellations across the country. These challenges also impacted the airline's financial performance with a 78% year-on-year decline in net profit for Q3 FY26 to ₹550 crore and a 6% drop in revenue from operations to ₹23,472 crore.