Street cheers GMR Infra's debt-reduction move

Earnings estimates may be revised but better show from power, roads, EPC holds key to major upgrades

The Street was enthused by GMR Infrastructure announcing gross debt reduction by almost half from Rs 37,480 crore to Rs 19,856 crore at the end of FY17. The stock gained more than 25 per cent intra-day, before closing at Rs 17, up 13.71 per cent, on Friday.

Given that there was pressure on profitability on many of the segments especially in the energy, engineering, procurement and construction (EPC) and road verticals, higher debt, and therefore increased interest outgo, was pulling down its financial performance. In FY17, for example, on an operating profit of Rs 3,497 crore, the company paid an interest