The rapid growth of India’s story is complemented by the expansion of India’s aviation sector. The domestic passenger traffic alone saw a 13.5% increase from the previous year.
The all-round development of the aviation industry is a result of multiple factors:
- Increase in middle-income households
- Availability of low-cost, price-competitive airlines
- Increasing support from the government
- Rapid infrastructure development
Let us have a closer look at the airline companies that might play a significant role in the growth of the aviation industry.
Also read: How to Expand Your Portfolio with International Investments
Aviation sector overview
The aviation industry in India is undergoing a remarkable transformation. Through various private initiatives and government support the industry has been able to change the long-held negative clout of poor efficiency, stagnation, bureaucratic delay, etc, and adopt a vibrant, competitive, technologically and infrastructurally enhanced aviation.
The third largest aviation sector in the world after the USA and China is India. India has 157 operational airports:
- 33 international,
- 113 domestic, and
- 11 custom airports.
Regional connectivity, especially connectivity to remote areas, is being made possible with ambitious projects like UDAN. It is interesting to note that if India’s exponential growth hadn’t been complemented by aviation projects like UDAN, it would have led to economic fallouts like regional income disparity and so on.
Therefore, one may conclude that as long as India maintains its growth trajectory there must be complementary growth in the aviation industry, followed by a growth in airline stocks.
Here is a curated list of the best airline stocks in India, so that you can take advantage of this underdog trend.
3 top airline stocks in India
The 3 best airline stocks in India based on market capitalisation are listed below:
- Interglobe Aviation (INDIGO)
- SpiceJet
- Afcom Holdings Ltd
Note: The companies are ranked as per their market capitalisation.
Let us examine each company in detail.
Interglobe Aviation Ltd (INDIGO)
Headquartered in Gurgaon, Haryana, Interglobe Aviation Ltd (INDIGO) is India’s largest and a low-cost passenger airline. IndiGo is also the largest individual Asian airline. Listed below are few company-specific metrics that will help you understand the company better.
| Revenue (Sales)(₹ Crores) | Load factor | Net profit(₹ Crores) | Debt levels(₹ Crores) |
| 68,904 | 85.9% | 8,167 | 80,137 |
SpiceJet Ltd
Headquartered in Gurgaon, Haryana, SpiceJet is a low-cost sixth-largest airline in India by the number of domestic passengers carried.
Listed below are a few important metrics that will help you to understand the company’s financial health.
| Revenue (Sales)(₹ Crores) | Load factor | Net profit(₹ Crores) | Debt levels(₹ Crores) |
| 7,050 | 90.3% | (409) | 11,782 |
SpiceJet faced certain internal and external challenges which it has overcome to some degree. SpiceJet has claimed to face the following roadblocks:
- Worldwide grounding of Boeing 737 Max aircraft in 2019.
- Absence of SLB (Securities lending and borrowing) gain and lack of fuel-efficient aircraft.
- Grounding of aircraft due to inability to pay lease.
- Rising fuel prices.
Afcom Holdings Ltd
Incorporated in February 2013, Afcom Holdings Ltd. operates cargo flights to ASEAN countries, particularly Singapore. The company’s portfolio primarily consists of:
- General Cargo
- Flying Fresh
- Flying Pharma
- Project Cargo
- Fly Courier
- Dangerous goods
- High-value Cargo.
The company signed a strategic agreement with Air Logistics Group on September 24, 2021. Listed below are a few key metrics that can help us understand the company better:
| Revenue (Sales) (₹ Crores) | Load Factor | Net Profit (₹ Crores) | Debt levels(₹ Crores) |
| 148 | NA | 25 | 22 |
Comparison of best airline stocks
| Name | CMP (₹) | PE Ratio | Market Cap (₹ Cr) | Sales Qtr(₹ Cr) | ROCE |
| Interglobe Aviation Ltd. | 4010.95 | 23.35 | 154942.97 | 16969.60 | 24.53 |
| SpiceJet Ltd | 56.72 | – | 7269.75 | 1695.52 | 1.69 |
| Afcom Holdings Ltd | 499.30 | 49.39 | 1241.15 | 88.76 | 36.65 |
Key takeaways
- Afcom’s PE ratio is higher than that of Interglobe Aviation. Given that Interglobe Aviation is the biggest player in the market, the greater PE ratio can also indicate overvaluation and not just investor confidence.
- SpiceJet recorded the maximum net profit in the last quarter amongst the best airline stocks (₹ 149.96 Cr) whereas Interglobe recorded the lowest (loss of ₹ 988.80 Cr).
- Amongst the best airline stocks in India Afcom recorded the lowest sales last quarter.
- SpiceJet has the lowest Interest coverage ratio amongst the best airline stocks in India. Its earnings include ₹1,552 Cr of Other Income.
- The creditworthiness of Afcom looks best amongst the best airline stocks.
Must read: Making Money in Stocks: A Beginner’s Guide to Investing
Factors to consider before investing in Airline Stocks
A few factors that you should consider before adding the best airline stocks to your portfolio are listed below:
- Government support:
Government support to the aviation sector has seen exponential growth and it can only be expected to grow in the future.
- Private players:
With the privatisation of Air India, the aviation industry can be expected to be a field day for private players. This is good news not only for consumers who can look forward to better service but also for investors since this will lead to very competitive market performances.
- Rapid expansion
With the increase in middle-income households, the aviation industry is expected to grow exponentially.
- Credit health and sick units:
Investors need to be cautious of the credit health of companies. Whilst fiercely competitive markets have a lot of advantages, a very prominent con is that poor-performing units will have a hard time reviving.
You may also like: Top Renewable Energy Stocks to Invest in India for 2024
Bottomline
This is a great opportunity for investors to add the best airline stocks to their portfolios. However, investors should trade with caution and take into consideration significant financial metrics and trends.
FAQs
- Which airline stock is best to buy in India?
If we take market capitalization into consideration, Interglobe Aviation Ltd is the best airline stock in India. Although, if we take profits into account, SpiceJet is a better performer. Which stock is best depends upon the parameter you choose for a competitive industry like aviation. The parameter on the other hand depends upon your goal. We have painstakingly curated the essential metrics and key takeaways. You should go through them and choose what works best for you.
- Which stock will boom in 2025 in India?
Sectors like IT, Energy sector, Healthcare, FMCG, and Infrastructure are expected to perform well in 2025. Along with these sectors, you can also keep an eye on the airline industry. The best airline stocks in India as per Market capitalization are Interglobe Aviation Ltd., SpiceJet Ltd., and Afcom Holdings Ltd.
- Which is the new airline in India in 2024?
Two airlines that are set to launch in India in 2024. They are Shankh Air and Alhind Air. Shankh Air will be the first scheduled airline from Uttar Pradesh and it will connect prominent locations through both interstate and intrastate routes. Alhind Air is stationed in Kerala and is aimed to focus predominantly on South Indian cities.
- Which airline is listed on the NSE?
Interglobe Aviation and Global Vectra Helicorp are listed in NSE. We have talked about Interglobe Aviation Ltd in detail. Don’t forget to check it out before adding the best airline stocks to your portfolio. Global Vectra Helicorp is headquartered in Maharashtra. With a Market Cap. of ₹ 339 Cr, it provides a ROCE of 7.21%.
- Is it good to invest in aviation?
Investing in the best airline stocks in India is a sound decision given the exponential growth and government support to this sector. With the increase in middle-income households, there would be an increase in demand for airlines. Moreover, with the exponential growth in India, the need to connect remote areas is also bound to increase. Therefore it is the right time to add the best airline stocks to your portfolio.
