GMR Airports hits over 13-year high; soars 45% in 1 month on solid earnings

The company said air passenger traffic would gain further momentum with addition of routes and airline capacity

Shares of GMR Airports Infrastructure hit an over 13-year high of Rs 65.39 as they rallied 10 per cent on the BSE in Thursday's intraday trade amid heavy volumes on improved financial performance. GMR Airports handle 26 per cent of domestic and 33 per cent of international passengers of India's airport traffic.

The stock was trading higher for a fourth straight day, surging 23 per cent during the period. It was quoting at its highest level since May 2010. The average trading volumes on the counter more than doubled today with a combined 64.7 million shares having changed hands on the NSE and BSE till 10:23 AM.
 

In the past one month, the stock has zoomed 45 per cent after the company's earnings before interest, taxes, depreciation, and amortization (Ebitda) increased by 77 per cent year-on-year (YoY) to Rs 753 crore in the June quarter (Q1-FY24).

Gross revenue increased by 40 per cent YoY to Rs 2,018 crore during the quarter, driven by strong growth in traffic at operational airports. Hyderabad Airport handled the highest-ever quarterly Pax traffic in Q1-FY24.

On the operational front, the management is seeing strong momentum in traffic and expects this upward trend to continue further.

In Q1-FY24, overall Pax traffic increased by 26 per cent YoY to 27 million passenger traffic, surpassing the pre-Covid levels, driven by pax groth at Delhi and Hyderabad airports.

During the quarter, in addition to the healthy growth of domestic traffic, international traffic has also increased substantially. Delhi and Hyderabad airport international traffic increased by 35 per cent and 33 per cent, respectively, GMR Airports said. Traffic is expected to gain further momentum with addition of routes and airline capacity, it added.

The company said it is steadily progressing on the merger of GMR Airports with GMR Airports Infrastructure, which will ultimately enhance the shareholder value. 

"The company has already received the Competition Commission of India (CCI) approval during March 2023 quarter and recently received a no objection to the merger from the RBI and both the stock exchanges. Now the merger application is expected to be filed shortly with National Company Law Tribunal (NCLT)," the company said.

Also, GMR received a favourable order from appellate court for Delhi Airport. The order, if approved by the court, will likely lead to significant value creation. GMR is set to benefit from growth in traffic, higher international pax and asset monetisation at the airport. With Groupe ADP taking a majority share in listed entities, analysts at ICICI Securities expect accelerated value creation over the medium term. The stock however, is trading above the brokerage firm’s 12-month target price of Rs 56 per share.

GMR Group is mainly engaged in development, maintenance and operation of airports, generation of power, coal mining and exploration activities, development of highways, development, maintenance and operation of special economic zones, and construction business including Engineering, Procurement and Construction (EPC) contracting activities.