GMR Airports Limited — Q1 FY26 earnings call

Call held 30 Jul 2025

Management summary

GMR Airports reported a strong Q1 FY26 with total income up 33% and EBITDA up 26%, driven by revised tariffs at Delhi Airport and robust traffic growth. Delhi Airport is on a path to profitability, while Hyderabad achieved record traffic. The company also made strategic acquisitions and is progressing on capex, though forex losses and increased debt were noted.

Highlights

  • Total income grew 33% YoY to INR32.2 billion, driven by revised tariffs at Delhi Airport and growth across all business segments.

  • EBITDA increased 26% YoY to INR12.8 billion, maintaining a stable 51% margin despite forex impact.

  • Delhi Airport's EBITDA was the highest in 4 years at INR6.3 billion, up 62% YoY, marking its journey towards profitability.

  • Hyderabad Airport recorded its highest-ever quarterly traffic of 8.1 million passengers and 8% YoY EBITDA growth to INR3.9 billion.

  • Acquisition of 70% stake in ESR GMR Logistics Park Private Limited for INR413 million is expected to be highly value accretive with high-teen IRRs.

Concerns

  • Reported a forex loss of INR1.4 billion in Q1FY26 due to Euro-INR rate reaching 100, impacting profit and loss statement.

  • Consolidated net debt (excluding FCCBs) increased by INR14 billion to INR25 billion compared to Q4FY25, partly due to Fraport stake financing and Bhogapuram capex.

  • Temporary disruption of traffic in Delhi due to India-Pak and Israel-Iran conflicts impacted international traffic during the quarter.

Key financials

  1. Total Income ₹32,200 Cr +33%YoY
  2. EBITDA ₹12,800 Cr +26%YoY
  3. EBITDA Margin 51%
  4. Forex Loss ₹1,400 Cr
  5. Loss from Continuing Operations ₹1,400 Cr
  6. Total Traffic 30.1 million passengers +4%YoY

What they filed

Q1 FY27: revenue up 156.7%, net profit up 132.6% against the same quarter last year.

₹ Cr · quarterly
Line itemQ2 FY25Q3 FY25Q4 FY25Q1 FY26Q2 FY26Q3 FY26Q4 FY26Q1 FY27
Revenue282 271 508 478 945 +235%1,239 +357%1,581 +211%1,227 +157%
EBITDA114 121 358 109 239 +110%343 +183%675 +89%386 +254%
Net profit-63 -49 68 -178 -133 −111%50 +202%403 +493%58 +133%
How to read this

₹ crore, as filed. The percentage beside a figure is the change against the same quarter a year earlier — never the quarter before, which would make every seasonal business look like it collapses and booms each year.

Segment breakdown

SegmentTotal IncomeEBITDA
Delhi Airport₹17,700 Cr₹6,300 Cr
Hyderabad Airport₹6,200 Cr₹3,900 Cr
Mopa (Goa) Airport₹1,024 Cr₹232 Cr
Combined Non-Aero Revenues (Delhi, Hyderabad, Goa)——

Capital allocation

high confidence
  • Capex Capex disclosed
    • Greenfield Project construction costs for Bhogapuram Airport ₹3,200 Cr
    Net debt at Bhogapuram increased by INR3.2 billion, which is going towards the Greenfield Project construction costs.
  • Debt Net ₹25,000 Cr Cost 14%
    • New borrowing Raised INR15 billion in 3-year non-convertible bonds in Q4FY25, with INR4 billion received in Q1FY26, mainly for financing Fraport's 10% stake in DIAI. ₹15,000 Cr
    • New borrowing Debt increased by INR2.6 billion due to the consolidation of ESR GMR Logistics Park Private Limited. ₹2,600 Cr
    • Refinance Proposed INR6,000 crores of non-convertible bonds to refinance Holdco debt. ₹6,000 Cr
    Consolidated net debt excluding FCCBs of INR26.2 billion which are deep into money stood at INR25 billion, increasing by INR14 billion versus Q4FY25. GAL had raised INR15 billion in the form of 3-year non-convertible bonds in Q4FY25, mainly for financing the purchase of Fraport's 10% stake in DIAI, of which the balance INR4 billion was received during Q1FY26. Net debt at Bhogapuram increased by INR3.2 billion, which is going towards the Greenfield Project construction costs. Net debt also increased by INR2.6 billion due to the impact of consolidation of ESR GMR Logistics Park Private Limited, which is now a wholly owned subsidiary post the acquisition.
  • Dividend ₹2.5/share (final)
    Hyderabad airport declared a second dividend of INR2.5 per share for FY25, taking the total dividend for FY25 to INR10 per share or INR3.8 billion, of which GAL's share amount amounts to INR2.8 billion.
  • M&A ESR GMR Logistics Park Private Limited Acquisition · Closed · Consideration ₹[object Object] (cash)

    Strengthens airport-based industrial and warehousing portfolio, highly value accretive with high-teen IRRs.

    IRRs expected to be in high teens while cost of debt is in single digits.

    Hyderabad airport concluded a share purchase agreement to acquire 70% stake in the ESR GMR Logistics Park Private Limited from other shareholders at a consideration of INR413 million. With this transaction, EGLPPL has now become a wholly owned subsidiary of Hyderabad airport. This transaction is highly value accretive to GAL with IRRs expected to be in high teens while the cost of debt is in single digits. This acquisition will further strengthen airport-based industrial and warehousing portfolio.
  • Liquidity Cash ₹34,000 Cr Cash and cash equivalents decreased from INR38 billion in Q4FY25 to INR34 billion in Q1FY26.
    My last question, sir, is if I were to look at our cash and cash equivalents, fourth quarter of last year, we were at about INR38 billion, and now today at about INR34.

Guidance & targets

Capacity

  • Airbus A320 production rate Capacity · by 2027 · High confidence 75 aircrafts per month

    Previously 60 aircrafts per month → 75 aircrafts per month

    Airbus is now seeing initial signs of stabilization in its supply chain and aims to ramp up Airbus A320 production to 75 aircrafts per month by 2027, up from a current 60.

    — Saurabh Chawla

Profitability

  • Delhi Airport profitability Profitability · Q2 FY26 · High confidence profit
    I think in the first quarter, the tariffs have been implemented only from 16th April onwards. That too, only for the tickets sold from 16th, only we have got the revised tariffs. So, as Sourabh has rightly pointed out, in the second quarter, we can reasonably assume that we should be making a green or profit in the second quarter.

    — GRK Babu

Margin

  • Delhi duty-free margins Margin · annualized basis · High confidence 17%

    Previously 14% → 17%

    We are still targeting our margins in the range of 17% and it could be some impact of seasonality here. Plus, as we will go, we are also looking at some efficiency coming in our procurement processes. So, that will further add to our margins.

    — Rajesh Arora

Debt

  • Holdco debt interest cost Debt · by second/third week of August · High confidence substantial reduction

    From 14% today

    The blended cost currently is around 14% and we are looking for a substantial reduction in the interest cost. Number two, we are trying to see and we have been discussing with the bankers and everybody, we are trying to complete the transaction by second week or third week of August.

    — GRK Babu

Regulatory

  • HRAB re-computation Regulatory · within 12 weeks from July 1st · Medium confidence re-computed and implemented
    I think the TDSAT order is very clear that the HRAB has to be recomputed and whatever the earlier computation done by the AERA has been quashed. So, the order says that in 12 weeks they have to compute and implement it. But as you know that law takes its own course, that AERA has got an opportunity that they can appeal. So, it will be very difficult to say that it will be implemented immediately.

    — GRK Babu

What to watch in Q2 FY26

Delhi Airport profitability

next quarter
Current Loss from continuing operations of INR1.4 billion (Q1FY26)
Target Green or profit in Q2 FY26

Why it matters

Delhi Airport's return to profitability is a key driver for overall company performance and financial health.

I think in the first quarter, the tariffs have been implemented only from 16th April onwards... So, as Sourabh has rightly pointed out, in the second quarter, we can reasonably assume that we should be making a green or profit in the second quarter.

Risks & concerns

  • Forex loss due to Euro-INR rate fluctuation

    medium

    INR1.4 billion forex loss in Q1FY26 due to Euro-INR rate reaching 100, impacting P&L, though considered notional for FCCBs.

    Management acknowledged

  • Aircraft production delays impacting capacity

    medium

    Aircraft production delays have constrained fleet expansions, leading to supply-side challenges despite strong demand for air travel.

    Management acknowledged

  • Uncertainty in HRAB re-computation and implementation

    medium

    TDSAT directed AERA to re-compute HRAB within 12 weeks, but AERA has the right to appeal, making the exact implementation timeline uncertain.

    Management acknowledged

  • Geopolitical issues impacting traffic

    low

    Temporary disruption of traffic in Delhi due to India-Pak and Israel-Iran conflicts impacted international traffic during the quarter, but expected to recover.

    Management acknowledged

Q&A highlights

5 direct, 1 evasive
Hypothetical RAB (HRAB) implementation timeline Evasive
So, honestly speaking, as a commercial organization, we would like it to be implemented immediately. But there is a process of law and there is a regulator. So, we really actually can't guide you as to when it will get implemented.

Analyst sought clarity on when the positive TDSAT order regarding HRAB re-computation would translate into financial benefits, but management could not provide a firm timeline due to regulatory processes and potential appeals.

Asked by Mohit

Forex loss linkage to FCCB MTM Direct
So, it is the forex loss which is booked on an MTM basis on the FCCB interest. So, that instrument itself is well into money and that's what I had highlighted in my opening remarks. There is no possibility of that being treated as debt.

Clarified that the INR1.4 billion forex loss was a non-cash mark-to-market impact on FCCB interest, which management considers equity, not debt, and expects to be written back as profits upon conversion.

Asked by Mohit

Hyderabad non-aero revenue per pax growth Partial
So, see when you look at the non-aero revenues, it has got two components. One is the non-aero commercial revenue and then there are certain fixed revenues in nature. So, non-aero commercial revenues have grown by almost 23% as against a pax growth of 17%, which means the SPP growth is about 6%.

Analyst questioned the soft non-aero revenue per pax growth at Hyderabad. Management explained that while commercial non-aero revenues grew faster than pax, fixed rentals diluted the overall per pax growth.

Asked by Karthik Chellappa

Free cash flow generation at consolidated level Partial
So, I mean, we still have to complete our investment in capex for the Bhogapuram Airport. And also, there is a possibility, high degree of possibility of us taking over Nagpur. I think we need to put that into play. But for our existing assets that we have right now, your outlook is correct.

Analyst asked if the company could generate free cash flow at a consolidated level given Delhi's profitability and Hyderabad's growth. Management acknowledged this for existing assets but highlighted ongoing capex for Bhogapuram and potential Nagpur acquisition as future cash uses.

Asked by Karthik Chellappa

Upside from taking back duty-free operations Direct
as we are now getting into a platform play with consolidation of Delhi, Hyderabad, Kannur, and Bhogapuram and Goa, we will this will also bring in the good amount of efficiency in our procurement processes, which will be further adding to the overall profitability and value creation in our duty-free business.

Management detailed the benefits of consolidating duty-free operations, citing procurement efficiencies and marketing synergies across multiple airports as key drivers for improved profitability.

Asked by Kaseedit

Delhi Airport incremental EBITDA vs revenue Direct
Nirav, if you look at your delta between the thing, you have to also look at the expenditure. There is a reduction in the expenditure which is there between Q4 and Q1 this year. So, if you adjust for that, the numbers will make more logical sense.

Analyst questioned the high incremental EBITDA (110%) relative to incremental revenue for Delhi Airport. Management clarified that a reduction in expenditure between Q4 and Q1 contributed to this, making the numbers more logical when considering both revenue and cost changes.

Asked by Nirav Shah

Advantage of Delhi duty-free moving to GAL Direct
So, Delhi duty-free earlier was more like about 67% held by GMR. 33% was with the joint venture partner. Now, it becomes 100% owned by GMR Airports. So, naturally, the 33% to the portion which was earlier going to a joint venture partner will fully flow to GMR.

Management explained that the transition means GMR Airports now fully owns the Delhi duty-free operation, allowing the 33% share previously going to the JV partner to flow entirely to GMR, enhancing profitability.

Asked by Nidhi Shah

Exceptional item of INR90 crores Direct
It consists of two components. Basically, number one is the daily duty-free has bought back the 25% of its equity. So, basing on that, the DIAL has also surrendered its 25% stake in the, I mean, in the Delhi duty-free, and they have got a capital gain of about INR53 crores, which is an exceptional item. Number two, earlier, they have made a provision for one of our joint ventures, Bajoli Holi, and now it is no more required. So, to the extent of about INR37 crores to INR38 crores has been reversed. Both put together is about INR91 crores is the exceptional item.

Management detailed the INR91 crore exceptional item, attributing it to a capital gain from Delhi duty-free's equity buyback (INR53 crores) and the reversal of a provision for a joint venture (INR37-38 crores).

Asked by Nidhi Shah

3 min read 6 chapters

Detailed narrative

Q1 FY26 Performance Overview and Market Dynamics

GMR Airports reported a robust Q1 FY26 with total income reaching INR32.2 billion, marking a 33% year-on-year growth. EBITDA also saw a significant increase of 26% year-on-year, totaling INR12.8 billion, while maintaining a stable EBITDA margin of 51%. The demand for air travel remains resilient and accelerating, despite global disruptions, with total traffic across GAL-operated airports (excluding Cebu) growing 4% year-on-year to 30.1 million passengers. The company noted that the challenge lies in supply rather than demand, with Airbus aiming to ramp up A320 production to 75 aircrafts per month by 2027.

Delhi Airport's Path to Profitability

Delhi Airport's total income surged 37% year-on-year to INR17.7 billion, primarily driven by a 127% year-on-year increase in aero revenues following the implementation of revised tariffs from mid-April. This led to a 62% year-on-year growth in EBITDA, reaching INR6.3 billion, the highest in four years. Management expressed confidence that Delhi Airport is now on a trajectory towards profitability, expecting to report a 'green or profit' in Q2 FY26. Non-aero and CPD income also showed healthy growth, with duty-free SPP increasing to INR1,033 in Q1FY26 from INR1,019 in Q1FY25.

Hyderabad and Mopa Airport Performance

Hyderabad Airport delivered a strong performance, handling its highest-ever quarterly traffic of 8.1 million passengers. Total income grew 8% year-on-year to INR6.2 billion, with EBITDA also increasing 8% year-on-year to INR3.9 billion, making it the highest quarterly EBITDA on record for the airport. Hyderabad Airport continued to be PAT positive. Mopa (Goa) Airport reported a total income of INR1,024 million, up 8% year-on-year, and maintained a positive EBITDA of INR232 million despite revenue share impacts.

Strategic Initiatives and Adjacency Businesses

GMR Airports is actively pursuing its strategy of consolidating stakes and expanding adjacency businesses. Hyderabad Airport acquired a 70% stake in ESR GMR Logistics Park Private Limited for INR413 million, making it a wholly-owned subsidiary and strengthening its industrial and warehousing portfolio with expected high-teen IRRs. The company also completed the takeover of Delhi duty-free concession and will take over Hyderabad duty-free operations in Q2FY26, aiming for procurement efficiencies and increased profitability. Construction is progressing on multiple airport land development projects, including new hotels at Delhi and Hyderabad airports.

Capital Allocation and Debt Management

Consolidated net debt (excluding FCCBs) increased by INR14 billion from Q4FY25 to INR25 billion in Q1FY26. This increase was primarily due to INR4 billion received in Q1FY26 for the Fraport stake purchase (part of INR15 billion raised in Q4FY25), INR3.2 billion for Bhogapuram Greenfield Project construction costs, and INR2.6 billion from the consolidation of ESR GMR Logistics Park. The company plans to refinance its Holdco debt of INR6,000 crores through non-convertible bonds, aiming for a substantial reduction from the current blended interest cost of 14%, with the transaction expected to close by mid-August. Hyderabad Airport declared a total dividend of INR10 per share for FY25, with GAL's share amounting to INR2.8 billion.

Regulatory Developments: HRAB Re-computation

The Telecom Dispute Settlement and Appellate Tribunal (TDSAT) quashed AERA's calculation of Hypothetical RAB (HRAB) for Delhi Airport and directed AERA to re-compute it within 12 weeks from July 1st, including both aeronautical and non-aeronautical revenues and costs from FY2008-2009. While this sets the stage for Delhi Airport to claim under-recovery in aero revenues from Control Period 1, management noted that AERA has the right to appeal, making the exact implementation timeline uncertain. The company expressed high confidence in the eventual implementation of the revised HRAB.

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