Mumbai: Brokerages have maintained bullish ratings on IndiGo’s parent InterGlobe Aviation as the company surprised the Street with better-than-expected March quarter result in uncertain Covid times. The stock ended up 8.5 per cent at 1,025.55 after hitting the upper circuit during the day. However, analysts also cautioned that there is little clarity on demand revival even when the pandemic is over. Brokerages have cut their target price on the stock by 5-17 per cent.

“...in the long run, aviation would witness continued headwind in terms of surplus capacity, the lack of confidence among passengers to resume travel, or demand for business travel,” said Motilal Oswal, which has maintained a neutral view on the stock and cut target price by nearly 17 per cent — the highest cut by a brokerage after the results.

The company on Tuesday reported a net loss of 870.8 crore, compared with a net profit of 589.6 crore during the same period a year ago.

Credit Suisse said InterGlobe’s result beat its estimates due to stronger-than-expected yield. The brokerage has slashed the earnings estimates by 33-56 per cent and cut target price by 13 per cent to 1,300 but maintained outperform rating on likely resumption of profitability by FY22.

Ambit has cut revenue estimates for the current financial year by over 50 per cent but kept FY22 estimates unchanged. The brokerage said valuations look attractive given IndiGo’s strong balance sheet and liquidity position.