GMR Group Expects Delhi Airport To Turn Profitable In Two Years

The proposed tariff hike will turn the Delhi airport profitable over the next three years, Saurabh Chawla, executive director of finance and strategy at GMR Group told NDTV Profit.

He added that the new tariffs are likely to come into play in the upcoming months and that will help the airport to turn profitable. "FY26, for Delhi airport, may not be fully profitable but we anticipate that FY27 will see it become fully profitable," he said.

According to Chawla, GMR Airport Infrastructure Ltd. is on track to clock a 15% revenue growth alongside a 10% passenger traffic surge over the foreseeable future.

"On a conservative basis, this outlook is optimistic, especially since the Delhi tariff (hike) has yet to be notified, which we expect will happen in the next six months," he said.

An optimistic Chawla added, "Currently, the yield per passenger in Delhi is about Rs 150, and we have already invested over Rs 12,000 crore in capital expenditure to expand the Delhi airport. Once the new tariff comes into play, we anticipate a sharp increase, which will be reflected in our numbers next year." 

GMR Airport Infrastructure reported tepid performance in the second quarter of the current financial year, with net loss widening to Rs 428.8 crore versus Rs 190 crore a year ago. Revenue, however, grew 21% year-on-year to Rs 2,495.5 crore, surpassing the Rs 2,461 crore estimate that was given by analysts tracked by Bloomberg.

Chawla did not see a big impact of the Q2 performance on the company's overall growth story. Elaborating, he said, "We are not a quarter-on-quarter story. We are an infra company with a long-term story of over 60 years. Within that space, on a QoQ basis, we do get impacted by some seasonality because we are an airport pair linked to basically how travellers are flying around. Q2 is usually a little dip in their travel plans, which gets reflected in our quarter-on-quarter performance." 

Chawla claimed that GMR Airports' long-term growth prospectus remains "robust" despite the muted Q2 performance. He predicted an overall growth rate in the range of 12–15%, supported by a spike in the revenue from the international segment.  

"We have guided our markets to expect growth of about 12–15% annually as we move forward, and that still holds. This is despite the fact that airlines are still facing supply shortages and haven't received all the aircraft they desire. However, we are performing well, particularly internationally, where Indian travellers are flying out a lot and spending significantly at the airports, especially on duty-free products," he said. 

Shares of GMR Airport Infrastructure Ltd. on Thursday was trading 1.35% lower at Rs 79.68 apiece on the NSE as against a decline of 0.41% on the benchmark Nifty 50.