GMR Airports Infrastructure shoots up by 8% on healthy business outlook

Shares of GMR Airports Infrastructure shot up 8.2 per cent at Rs 92.34 a piece on Friday’s intraday trade. A combined 3.07 million shares of the company changed hands on the BSE. In comparison the S&B BSE Sensex fell by 0.31 per cent 74,109 levels.

The stock of GMR Airports reached a 52-week high of Rs 94.30 on February 20, 2024, while it hit a 52-week low at Rs 40 on May 29, 2023.

GMR Airports is engaged in development, operation and maintenance of airports along with offering integrated security solutions. The airport portfolio comprises three operational assets namely, Delhi International Airport, Hyderabad International Airport in India, and Mactan Cebu International Airport in The Philippines.

The recent uptick in the stock price, however, comes amidst a positive revenue growth environment for airports operators in India. According to a recent report by Crisil Ratings, a 10 per cent increase in passenger traffic on the high base of fiscal 2024, combined with capital expenditure (capex)-linked tariff hikes and rising non-aeronautical revenue per passenger, will help grow the revenue of leading private airport operators by around 30 per cent in FY25.

The rising revenue will restore the cushion for debt servicing to around 1.4 times, taking it back to the level last seen before the Covid-19 pandemic.
Airports had dipped into their cash reserves to service debt during this period, report by Crisil
“Taking off from the strong base of last fiscal, passenger traffic growth will continue its momentum in fiscal 2025 and rise more than 10 per cent to over 415 million. Continuing economic growth, opening of more airports and improving regional connectivity are providing the tailwinds necessary for domestic traffic growth. On the international side, growing business travel and easing visa requirements to countries such as Malaysia and Vietnam, reducing wait times for visa applications to western Europe1 and improving connectivity to western and Southeast Asia are significant positives,” said Ankit Hakhu, Director, CRISIL Ratings.

GMR Airports reported a 20 per cent year on year rise in Pax traffic in the month of March, crossing over 120 million Pax mark (Highest-ever Pax Traffic) backed by robust domestic traffic and significant upward-skewing International traffic. Its domestic traffic grew by 17 per cent YoY and International Traffic rose 33 per cent YoY in March 2024.

Shares of GMR Airports have zoomed 15 per cent in the last one month, while it grew over 70 per cent in the last six months. It is presently trading at a price to earnings multiple of 1063.88 times. At 12:55, the shares of the company were up 6 per cent at Rs 90.24 per share on the BSE.