GMR Airports

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 disruption^🌐s, 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 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 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.

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.

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.

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.