India’s aviation industry is experiencing rapid growth, driven by rising air travel demand and government support. In 2024, the sector is rebounding strongly, with domestic passenger traffic reaching 1.31 crore in July, an 8.6% increase from the previous yearVaranasi Wealth Management. Indian airlines flew a record 79.3 million passengers in the first half of the year, with IndiGo holding a dominant 62% market share. Despite challenges like supply chain disruptions and engine failures, the industry shows immense potential. This article highlights the top aviation stocks on the NSE and explores key opportunities and challenges in 2024.
Aviation stocks in India include shares of companies involved in the airline industry, airport operations, and related services. Prominent airline companies like IndiGo, SpiceJet, and Air India are key players in the Indian market. Apart from these, you may also come across airport stocks such as GMR and Adani Enterprises, which manage several major airports in the country.
These stocks are impacted by various factors, including air traffic, fuel prices, and government regulations. With the aviation industry in India growing, investors are keeping a close eye on airline stocks and airport-related companies listed in NSE and BSE.
Note: The data is from 30th September 2024, and it is sorted using Tickertape Stock Screener. To get the list of aviation stocks listed on NSE, the below-listed filters are applied –
Sector > Industrials > Airlines, Airports1M Return: Sort from highest to lowest
🚀 Pro Tip: Utilise Tickertape’s Market Mood Index to gauge market sentiment and make informed investment decisions based on real-time market data and trends.
But first, let’s understand what a smallcase is.
smallcases are modern investment products that help investors build low-cost, long-term & diversified portfolios with ease. A smallcase is a basket or portfolio of stocks/ETFs representing an idea – an objective, theme, or strategy. They are created and managed by SEBI-registered experts.
With over 500 smallcases to choose from, here are some of the most popular smallcases you can check out:
Note: The smallcases are mentioned only for educational purposes and are not meant to be recommendatory. Investors must conduct their own research and consult a financial expert before making any investment decisions.
Disclosures for aforementioned smallcases
Founded in 1997, Global Vectra Helicorp Ltd is one of India’s largest private helicopter companies, providing offshore and onshore air services to oil and gas companies as well as other sectors like tourism and corporate charters. The company operates a fleet of helicopters to support the logistics of various industries.
The company has a market cap of Rs. 483.70 cr., and its stock closed at Rs. 338.60. It currently has a high PE ratio of 403.08. Over the past month, it delivered a return of 29.88%, and the latest reported net income is Rs. 1.20 cr. Over the last five years, it has achieved a modest historical revenue growth rate of 1.36%.
GVK Power & Infrastructure Ltd was incorporated in 1994 and is involved in the development of infrastructure projects, including power, airports, roads, and urban infrastructure across India. The company also manages and operates various public-private partnership (PPP) projects.
With a market cap of Rs. 1,012.27 cr., the stock price closed at Rs. 6.41. The company’s PE ratio stands at 49.62. It recorded a 1-month return of 15.32%, with a net income of Rs. 20.40 cr. However, its 5-year historical revenue growth has been negative, at -23.43%.
Interglobe Aviation Ltd, better known as IndiGo, was founded in 2006 and operates India’s largest airline based on passenger carried and fleet size. The company focuses on providing low-cost domestic and international air travel, with a significant presence in the Indian aviation market.
The company has a large market cap of Rs. 1,84,920.62 cr., and its stock closed at Rs. 4,787.45. The PE ratio is 22.63, indicating a moderate valuation. Over the past month, the stock saw a return of 3.38%. Interglobe Aviation reported a robust net income of Rs. 8,172.46 cr., with a 5-year historical revenue growth of 19.02%.
SpiceJet Ltd, launched in 1984, is a low-cost airline operating in India, offering both domestic and international flightsIndore Stock. Known for its affordable airfare and frequent services, SpiceJet is a major player in the Indian aviation sector.
The company has a market cap of Rs. 8,164.34 cr., and the stock closed at Rs. 63.70. The PE ratio is negative at -19.31, reflecting recent financial difficulties. The 1-month return is -5.46%. SpiceJet reported a net income loss of Rs. -422.82 cr., and its 5-year historical revenue growth stands at -1.66%.
Founded in 1992, Jet Airways was once one of India’s premier full-service airlines. However, the company has faced significant financial challenges and ceased operations in 2019. It is currently undergoing revival efforts through new ownership and restructuring.
Jet Airways has a market cap of Rs. 437.58 cr., and the stock closed at Rs. 38.52. The PE ratio is negative at -0.44, reflecting its distressed financial condition. Over the last month, the stock delivered a return of -7.68%. The company reported a net income loss of Rs. -1,002.06 cr. and has experienced a sharp decline in revenue, with a 5-year historical revenue growth of -70.31%.
To invest in the best Indian airline companies, follow these steps.
Step 1: Launch Tickertape Stock Screener.
Step 2: Go to ‘Sectors’ and Select > Industrials > Airlines and Airports
Step 3: Add over 200 filters to narrow down the Best indian airlines stocks in India.
You can choose fundamental filters like ROE, Net Profit Margin, or Debt-to-Equity Ratio. You can also select technical filters like RSIMumbai Stock Exchange. The selection criteria of filters depend on your preferenceAhmedabad Wealth Management. While thorough research on list of airlines in India is important, it is worthwhile to consult a professional before investing.
When looking for the best aviation stocks in India, you may notice certain characteristics that make these stocks appealing:
Market Leadership: Companies like IndiGo dominate the Indian market, with a significant share of domestic and international flightsAgra Stock. A company with strong market presence often reflects better operational strength.Solid Financial Position: Financially stable companies, with good cash flow and manageable debt, tend to offer more long-term value. Look at their past performance, profits, and balance sheet.Growth and Expansion Plans: Airlines placing large orders for new aircraft or expanding their routes have a higher growth potential. IndiGo and Air India are examples of companies expanding their fleets.Government Support: The aviation industry benefits from policies like the UDAN scheme, which boosts regional connectivity. Companies aligned with these policies can see growth opportunities.
The Indian aviation sector has seen significant growth, largely due to supportive government policies aimed at enhancing infrastructure and connectivity. The government’s commitment is evident through initiatives like the Regional Connectivity Scheme (RCS), which aims to make air travel accessible to underserved regions. This scheme has operationalized over 579 routes and developed 85 airports, with a target of reaching 1,000 routes by 2024.
The government’s focus on expanding the aviation market has led to a surge in airline orders, with airlines placing orders for over 900 new aircraft. This expansion is expected to bolster aviation stocks, as increased fleet sizes typically correlate with higher revenue potential[3]. Furthermore, the recent merger between Air India and Vistara, which allows Singapore Airlines to acquire a 25.1% stake in Air India, is anticipated to create a more robust entity in the market, positively impacting stock performance in the sector.
Additionally, the government’s emphasis on sustainability and carbon neutrality is reshaping operational strategies within the industry. Airlines are increasingly investing in modern fleets and greener technologies, which may enhance their long-term viability and attractiveness to investors.
Historically, aviation stocks in India have shown resilience during economic downturns, although they are not immune to challenges. Airlines like IndiGo and Air India have adapted their strategies by optimizing routes and focusing on cargo operations during periods of reduced passenger demand. For instance, IndiGo’s cargo division is projected to grow by 17% this fiscal year despite broader economic challenges.
The consolidation within the sector, exemplified by the Air India-Vistara merger, may also provide stability during downturns. Mergers often lead to cost efficiencies and enhanced market share, which can buffer against economic fluctuations. Moreover, government policies aimed at enhancing regional connectivity can provide airlines with new growth avenues even when traditional passenger traffic declines.
However, financial challenges remain prevalent. Airlines like SpiceJet have faced legal and financial difficulties that have impacted their stock performance negatively during downturns. The need for ongoing financial support and strategic restructuring is critical for maintaining investor confidence in such scenarios.
Before investing in aviation sector stocks, you might want to evaluate:
Fuel Costs: Since fuel accounts for a major portion of an airline’s operating costs, fluctuations in fuel prices directly affect profitability.Economic Conditions: The performance of airline companies in India is often tied to economic growth. A slowdown can reduce air traffic demand, impacting revenues.Fleet Efficiency: Airlines with modern, fuel-efficient aircraft may perform better in the long run due to lower operating costs.Government Policies: Regulatory changes related to taxes, airport fees, or subsidies can affect the profitability of both airline companies and airport-related stocks.Competition: The Indian aviation market is highly competitive. Mergers and alliances, like the Air India and Vistara merger, can reshape the competitive landscape and influence stock performance.
Investing in aviation stocks in India can offer several advantages, especially in a fast-growing market:
High Growth Potential: The aviation industry in India is expanding rapidly, driven by increased domestic and international air travel demand. Airlines like IndiGo and Air India are seeing increased passenger traffic, which can boost revenues.Government Support: Initiatives like the UDAN scheme are promoting regional connectivity, which benefits both airline companies and airport stocks. This policy support can drive long-term growth in the sector.Market Leaders: Top airlines such as IndiGo dominate the market, giving them the ability to expand their fleets and increase their routes. This strong market position often translates into stable returns for investors.Global Opportunities: Indian airlines are expanding internationally, creating new revenue streams. This can lead to higher profitability for aviation stocks India.
Potential risk factors to consider before investing in aviation stocks:
Dependence on government regulations and unpredictable situations, such as the COVID-19 pandemic.Dependence on geopolitical connections and conditions, which can impact the demand and supply chain.Risks associated with fuel prices, as higher prices can lead to fewer people choosing air travel, affecting stock prices.Recovery from losses incurred during the pandemic lockdown period.Decrease in business travel due to the adoption of online meetings, impacting the overall number of people travelling for business purposes.
Investing in aviation stocks India is suitable for individuals who:
Have a Long-Term View: The aviation industry in India is expected to grow over the long term. Investors with a long-term horizon may benefit from this growth.Are Comfortable With Volatility: Since the airline industry is sensitive to factors like fuel prices and economic conditions, investors must be able to withstand market fluctuations.Seek Exposure to Growth Sectors: For those looking to invest in high-growth sectors, the aviation industry offers potential opportunities as air travel continues to increase across India and internationally.Understand Industry Risks: Investors who are aware of the risks associated with aviation stocks—such as operational costs and economic sensitivity—can make informed investment decisions.
India’s aviation sector has seen remarkable growth with increased speed and capacity to carry passengers, and the government is investing in airport infrastructure. India is among the top 10 aviation markets, serving 83 mn domestic travellers annually. If you’re considering exploring aviation stocks, it is important to consider risks such as dependence on government regulations and geopolitical connections, fuel prices, recovery from pandemic losses, and decreased business travel. Despite these risks, the aviation sector has significant potential for growth and contribution to the Indian economy.
Moreover, with Tickertape pro, you can ascertain the valuation, profitability, red flags, among other key parameters available under ‘Scorecard’, to evaluate aviation stocks. The advanced set of features are designed to help investors evaluate aviation stocks effectively and make informed decisions.
Here’s are some of the popular stock collections across different sectors in India:
Simla Wealth Management
