Lower crude oil prices to remain a favorable factor for Indigo shares

Indigo shares are gaining today after being on the decline for the past few days. At 12:40 p.m. 11^th November, 2025, the stock is up by 2.62%, trading at Rs 5,735. In the past 5 days, the stock has lost 1.89%. Nifty 50 index is up by 0.0076% at this time.

Indigo’s shares saw declines in the past few days after the company posted its September quarter result. The company’s loss in the September quarter stood at Rs 2,582 crore. This was an increase over the Rs 986.7 crore loss that it had posted in the corresponding quarter of the previous year. But a large part of these losses were because of depreciation of rupee against the dollar.

Exchange rate risk exposure

A number of liabilities of Indigo, such as lease payments, are denominated in dollars. Due to depreciation of rupee against the dollar, the cost of these liabilities in rupee terms went up in the quarter.  Indigo is on a rapid international expansion spree. It now offers almost as many international flights as Air India. With these international flights its earnings in dollars and other foreign currencies will increase. This will reduce its foreign exchange translation risk that comes with higher exposure to just one currency, Indian rupee.

Lower crude oil prices are very beneficial for Indigo

Indigo has market share dominance in the domestic market. It currently has around 64% share in the domestic market. Competition has increased in the past some time from both Akasa Air and Air India. A thing that is going in favor of Indigo is low crude oil prices. According to IATA data, fuel costs make up around 28% – 29% of the total operational costs of an airline. Lower crude oil prices mean lower aviation turbine fuel (ATF) costs for Indigo.

Oil prices are likely to remain subdued in the foreseeable future. If global economic slowdown exacerbates due to high American tariffs, then oil prices may slip further. Brent crude oil for December delivery is currently trading at $63.82 per barrel. WTI crude for December delivery is trading at $59.88 per barrel.

Lower crude oil prices, dominance in the domestic passenger market, and continued international expansion make future prospects for Indigo brighter. The stock is currently trading at 12-month trailing price-to-earnings (P/E) ratio of 43.13. 52-week high price of the stock currently is Rs 6,232.50. 52- week low price of the stock is Rs 3,830.

Disclaimer : This content is only for informational purpose. It does not make any recommendation to act or invest.

Source: NSE, Indigo