IndiGo shares skyrocket 11% as crude oil price nosedives 16% amid US-Iran ceasefire — Time to buy?

Shares of InterGlobe Aviation, which operates budget carrier IndiGo, rose 11% in the morning trade on Wednesday, April 8, boosted by a sharp decline in crude oil prices today following the announcement of a two-week ceasefire in the US-Iran war.

IndiGo, which has lost 11.5% since the onset of the US-Iran war on February 28, emerged as the top gainer in the Nifty 50 pack and erased all of its losses amid a 11.13% rally to ₹4,744 apiece on the NSE today.

What's driving IndiGo shares higher?

The US-Iran war has sparked a sharp rise in crude oil prices, which also drove the jet fuel prices higher, upending the global aviation industry. The global average jet fuel price rose to $195.19 per barrel for the week ending March 27, up from $99.40 at the end of February, recording a surge of close to 100%, according to International Air Transport Association (IATA) data.

The announcement of a two-week ceasefire in the US-Iran war earlier today has cooled off the global crude prices to below $100 a barrel, providing relief to many industries. Since fuel remains the single biggest cost item for an airline, accounting for roughly 40-50% of its overall expenses, any sustained cooling in oil prices can offer a direct margin tailwind for the airline stock.

However, Willie Walsh, director general of IATA, told Reuters that even if Iran reopened the Strait of Hormuz, it would take months for jet fuel supply to recover, given disruptions to Middle East refining capacity.

To mitigate the impact of higher ATF charges, IndiGo had announced an upward revision in fuel surcharge.

The ceasefire is also expected to ease international operations that saw a disruption following airspace restrictions. Indian carriers have cancelled over 10,000 flights since the onset of the West Asia conflict, according to a senior government official quoted by PTI.

In another relief for Indian airlines, airport tariff regulator Airport Economic Regulatory Authority (AERA) on Tuesday announced a 25% reduction in landing and parking charges across major airports.

This reduction, which comes into immediate effect, will be applicable to all domestic flights for a period of three months, AERA said in an order.

Should you buy IndiGo stock now?

IndiGo shares are up 18% in April so far but remain 8% lower in 2026. However, this decline comes amid the unexpected Middle East crisis and after three years of back-to-back gains between 2023 and 2025, during which the stock rallied a whopping 113%.

Going ahead, the latest ceasefire has meaningfully improved the short-term outlook for IndiGo as the pressure from crude prices begins to ease.

For an airline, lower aviation fuel costs can quickly change the earnings picture, and that is exactly why the stock has reacted so sharply, said Harshal Dasani, Business Head at INVasset PMS. That said, the sharp rise in the stock also suggests that a good part of the immediate optimism may already be priced in, said the expert.

From here, he said the market will look beyond just cheaper oil and focus on whether IndiGo can maintain strong passenger demand, healthy yields and disciplined execution as it continues to expand capacity.

"The broader structural story remains intact, with IndiGo still seen as the strongest domestic aviation play because of its scale, network and cost leadership. So the outlook remains positive, but the next leg of upside will likely depend on fuel prices staying benign and operational performance remaining steady rather than on sentiment alone," Dasani opined.

Disclaimer: This story is for educational purposes only. The views and recommendations made above are those of individual analysts or broking companies, and not of Mint. We advise investors to check with certified experts before making any investment decisions.