GMR Airports (GMRINFRA) Q1 25/26 earnings summary

Executive summary

• Air travel demand remains robust, with a 40% drop in real flying costs over the past decade, but supply is constrained by aircraft production delays and near-exhausted capacity.

• Strategic investments in capacity, digitization, and passenger experience position the business to capitalize on sustained traffic growth and infrastructure demand.

• Passenger traffic at operated airports reached 30.1 million in Q1 FY26, up 4% year-over-year, with Hyderabad Airport achieving record quarterly traffic and Delhi Airport seeing a 1.2% year-over-year decline due to temporary disruptions.

• Non-aero and adjacency businesses showed strong growth, with significant expansion in cargo, duty free, and F&B operations.

• Major ESG achievements include improved ratings, LEED Platinum certification for Hyderabad, and Level 5 carbon accreditation for Delhi and Hyderabad airports.

Financial highlights

• Q1 FY2026 total income reached INR 33.2 billion, up 33% year-over-year, with EBITDA up 26% to INR 12.8 billion and a stable margin of 51%, despite a forex loss of INR 1.4 billion.

• Loss from continuing operations narrowed to INR 1.4 billion from INR 3.4 billion year-over-year; near break-even at PAT level excluding forex impact.

• Delhi Airport standalone Q1 FY26 EBITDA: INR 6.3 billion (up 61.8% year-over-year, margin 63%); Hyderabad Airport EBITDA: INR 3.9 billion (up 8% year-over-year, margin 65%).

• Consolidated net debt (excluding FCCBs) stood at INR 329 billion as of June 30, 2025, up INR 14 billion sequentially, mainly due to bond issuance and project investments.

• Cash and cash equivalents decreased from INR 38 billion in Q4 FY2025 to INR 34 billion, reflecting ongoing capex and project investments.

Outlook and guidance

• Positive outlook for MRO business and airport operations, with expectations of free cash flow generation as Delhi turns profitable and Hyderabad continues growth, subject to completion of Bhogapuram capex and potential Nagpur acquisition.

• Focus on margin expansion, cost rationalization, and optimizing cost of debt.

• Accelerate progress in greenfield projects at Crete and Bhogapuram; Nagpur Airport takeover expected in Q2 FY26.

• Management expects revenue and margins to improve in subsequent years post receipt of tariff orders for DIAL and GHIAL.

• Duty-free margins targeted at 17% for the year, with efficiency gains expected from procurement improvements.