IndiGo Correction Signals Upside, Largecap IT Safer Than Midcaps – Sandip Sabharwal

Markets have seen heightened volatility over teh past few weeks,but selective opportunities continue to emerge,especially in large,fundamentally strong names. Speaking to ET Now, market expert Sandip Sabharwal shared his views on InterGlobe Aviation (IndiGo), the IT sector, financial stocks amid the IIFL episode, and the recent correction in jewelry counters.

InterGlobe Aviation, a Nifty 50 constituent and India’s largest airline by market share, has corrected nearly 20% from its recent highs. The stock, which commands over 60% of the domestic aviation market, has slipped from around ₹5,000 to close to ₹4,900.

Contextualising the recent developments, ET Now noted that the airline operates in a near-monopolistic environment and asked whether the recent numbers justify continued conviction in the stock.

Responding, Sabharwal said, “The numbers were decent in the context of whatever happened because the disruptions were meaningful. Then there was a forex impact, followed by the labor code impact, which has affected most companies this quarter. Even after that, they have reported a profit and guided for decent growth despite the kind of restrictions put on them.”

He added that the aviation sector has high entry barriers, making it extremely tough for new players to meaningfully challenge incumbents. “In all probability, it is indeed very tough for any new airline to come and take capacity. Even for existing ones, it is indeed tough as airlines is not a business where you can just get