IndiGo gains 3% after Morgan Stanley upgrades stock

Shares of InterGlobe Aviation gained 3 per cent in the afternoon trade on Thursday after Morgan Stanley upgraded its rating to overweight from equal-weight.

According to Morgan Stanley, earnings trough is behind, valuation is attractive, and competitive position of IndiGo has strengthened in this downcycle.

On pricing side, it sees yields starting to rise, and recent correction in crude and appreciation in rupee also stand to help the company.

Morgan Stanley also expects profitability to improve from here, as current RASK, CASK spreads of the industry are unsustainable and will improve.

The scrip was 3.13 per cent up at Rs 1,059.20 at around 02.38 pm while the benchmark BSE Sensex rose 0.35 per cent to 35,902.99 . It opened at Rs 1,040 on the BSE against its previous closing of Rs 1027.10.