GMR Airports

GMR Airports delivered a strong Q2 FY26, with consolidated total income surging 45% year-on-year to INR 37.5 billion. This robust growth translated into a 59% increase in EBITDA, reaching INR 15.3 billion, with the EBITDA margin improving to 53% for the quarter. The company successfully reversed its previous year's loss, reporting a profit of INR 351 million from continuing operations, compared to a loss of INR 4.3 billion in Q2 FY25.

Delhi Airport was a significant growth driver, with its total income rising 34% year-on-year to INR 18.5 billion. This was primarily due to a substantial 166% year-on-year increase in aero revenues, following the implementation of revised tariffs from mid-April. The company also took over Delhi's duty-free and cargo businesses, contributing to healthy non-aero and CPD income, with duty-free SPP increasing to INR 1,046 in H1 FY26 from INR 1,005 in H1 FY25.

Hyderabad Airport continued its strong performance, recording a 17% year-on-year increase in total income to INR 6.7 billion. Non-aero revenues were particularly robust, growing 38% year-on-year, which helped drive a 17% rise in EBITDA to INR 4.3 billion, marking its highest quarterly EBITDA on record. The airport is nearing full capacity, prompting a proposed INR 14,000 crore expansion, expected to kick off in CY 2027, to include a new terminal, runway, and cross taxiways.

GMR Airports is actively transforming into a consumer business by bringing non-aero operations directly under GMR Airports Limited (GAL). This quarter saw GAL take over Delhi duty-free and cargo businesses, as well as Hyderabad duty-free operations, with the full quarter impact expected in Q3. The company targets a sustainable 14-15% year-on-year growth in non-aero revenues, driven by new outlets and improved margins, with current high growth partly attributed to new outlet openings.

The company successfully refinanced INR 59 billion in non-convertible bonds, repaying INR 50 billion of existing debt and an INR 8.5 billion redemption premium, achieving a 300 basis point saving with an effective cost of 10.225%-10.425%. Additionally, INR 10 billion was raised for Delhi Airport via 15-year NCDs at 8.75%, saving 125 basis points. The board has approved raising INR 21.5 billion for refinancing Hyderabad Airport's 2026 foreign currency bonds, demonstrating proactive debt management.

Significant progress was made on new airport constructions, with Bhogapuram achieving 87.5% physical completion and expected to go live in the next 9-12 months. Crete Airport, where GMR holds a minority share, is 60% complete and anticipated to finish within two years. The Delhi Cargo City development, spanning 50.5 acres, is progressing, with the first phase (30.5 acres) targeted for completion much ahead of the 24-30 month timeline, enhancing cargo infrastructure.

Overall traffic at GMR's operated airports declined 3.5% year-on-year in Q2 to 27.8 million passengers (excluding Cebu), primarily due to temporary disruptions from geopolitical events and runway upgradation at Delhi. However, with Delhi's runway fully operational and Terminal 2 resuming full operations, management expects a pick-up in traffic for the seasonally strong Q3 and the winter schedule. Hyderabad is projected to see 10-12% overall traffic growth this year.