Buy GMR Airports Ltd for the Target Rs 120 by Emkay Global Financial Services Ltd
GMRAIRPO reported EBITDA of Rs14.8bn (2% yoy), 6%/2% above Emkay/consensus estimates. Passenger growth remained subdued at 1% yoy (-3% on LFL basis) during the quarter. Revenue grew 12% yoy, aided by growth in non-aero revenue and commissioning of Nagpur and Vizag airports. Aero YPP stood at Rs497 (6%/12% yoy/qoq), while non-aero IPP saw healthy sequential growth of 12% to Rs772. Passenger traffic outlook remains positive in 2HFY27, supported by seasonality factors and slot requirement from airlines, while nonaero income is expected to remain resilient. We have reduced our FY27-29E EBITDA by 1-3% on revising passenger traffic assumptions in GHIAL and MOPA. We reiterate BUY on GMRAIRPO, with an unchanged SOTP-based TP of Rs120, based on 23x implied FY29E EV/EBITDA
2QFY27 snapshot
Delhi (DIAL): Passenger traffic stood at 18.1mn (3% yoy). Revenue stood at Rs20.5bn (12% yoy), led by aero and non-aero revenue growth of 5% and 20% yoy, respectively.
Hyderabad (GHIAL): Passenger traffic stood at 6.5mn (-11% yoy). Revenue stood at Rs6bn (-4% yoy); aero revenue declined 8% yoy, while non-aero revenue grew 5% yoy.
Goa (MOPA): Passenger traffic stood at 0.9mn (-24% yoy). Revenue stood at Rs1bn (26% yoy); aero revenue grew 35% yoy, while non-aero revenue declined 5% yoy.
GAL platform: Non-aero revenue stood at Rs10bn (35%/-2% yoy /qoq).
Consolidated financials: Revenue stood at Rs41bn (12%/3% yoy /qoq). EBITDA stood at Rs 14.8bn (2%/2% yoy /qoq). Adjusted net loss stood at Rs0.15bn as against loss of Rs0.72bn in 2QFY26. Net debt at Rs340bn is unchanged qoq.
Non-aero remains healthy in 2QFY27
Non-aero revenue remained healthy during the quarter and non-aero IPP stood at Rs772 (12% qoq). Growth was led by an increase in per passenger spend and increase in commercial area of the non-aero business. DIAL and GHIAL witnessed healthy non-aero revenue growth of 20% and 5%, respectively. GHIAL’s non-aero revenue remained resilient, despite a 11% decline in passenger traffic.
2H outlook positive
Passenger growth remains subdued at 1% yoy for 2QFY27 and 1HFY27. LFL passenger growth stood at -3% for 2QFY27 and -1% for 1HFY27, primarily impacted by GHIAL and MOPA airports. GHIAL witnessed a 12% decline in passenger traffic in 1HFY27 due to route rationalization by Indigo and West Asia conflicts. 2HFY27 passenger outlook remains positive, supported by seasonal demand and higher airline slot requirements across DIAL, GHIAL, and MOPA, indicating stronger passenger bookings. International traffic has recovered in GHIAL. We believe non-aero revenue should also remain resilient in 2HFY27, led by commercial area increase and passenger traffic growth.
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