Cost and competition may keep IndiGo's growth under check: Brokerages

Yields have been higher in Q2; market leader continues to gain market share

The stock of India’s largest airline InterGlobe Aviation (IndiGo) has gained about 23 per cent since the beginning of July. This was led by expectations of rising yields and market-share gains. While yields have remained high in a seasonally weak quarter, its market share in July was hovering just under 59 per cent. Brokerages are, however, divided over the extent of gains, given the concerns related to elevated fuel costs and competitive pressures.

The gains for IndiGo on yields emanate both on account of higher prices and capacity constraints. Citing IndiGo management, analysts Aditya Mongia and Teena Virmani of Kotak