GMR Airports Expected to Triple EBITDA in Five Years
Brokerage firm Jefferies has initiated coverage on GMR Airports Ltd. with a 'buy' recommendation and a price target of ₹100
Gmr AirportsJefferiesEbitdaAir TrafficRetail ConsumptionReal Estate OpportunityReal EstateMay 27, 2024
Jefferies has initiated coverage on GMR Airports Ltd. with a 'buy' recommendation and a price target of ₹100, implying a potential upside of 15% from current levels. The brokerage firm believes that GMR Airports is evolving from a utility to a retail consumption play and will benefit from the strong growth outlook in air traffic, travel retail opportunity, a hike in aero tariffs, and unlocking the real estate opportunity.
A further re-rating, according to Jefferies, will be supported by more simplification of the group's corporate structure, better leverage ratios, and Groupe ADP's backing. The presence of ADP, both at the strategic and the board level, will help GMR's fund-raising capabilities, project execution, and bidding capabilities.
Jefferies expects passenger cap at the Hyderabad airport to increase from 12 million to 34 million, while GMR's Goa Airport is also in the middle of a ramp-up. The brokerage expects passenger traffic to grow at a Compounded Annual Growth Rate (CAGR) of 11% over financial year 2024 - 2027.
Near tripling of the aero traffic at the Delhi airport between financial year 2025 - 2029, higher tariffs at the Hyderabad airport, and new tariffs taking effect at the Goa airport will all contribute to the topline and the company's EBITDA growth over financial year 2024 - 2027.
GMR Airports Ltd. is a subsidiary of GMR Infra Ltd., a leading infrastructure company in India. Groupe ADP, a global airport major, has a strategic partnership with GMR Airports Ltd.
GMR Infra Ltd. is a leading infrastructure company in India, with a presence in airports, energy, transportation, and urban infrastructure. The company has a strong track record of project execution and has developed several iconic infrastructure projects in India.
Frequently Asked Questions
What is the expected EBITDA growth of GMR Airports Ltd in five years?
GMR Airports Ltd is expected to triple its EBITDA in five years according to a report by brokerage firm Jefferies
What is the price target set by Jefferies for GMR Airports Ltd ?
Jefferies has set a price target of ₹100 for GMR Airports Ltd implying a potential upside of 15% from current levels
What are the key factors driving the growth of GMR Airports Ltd ?
The strong growth outlook in air traffic travel retail opportunity a hike in aero tariffs and unlocking the real estate opportunity are expected to drive the growth of GMR Airports Ltd
What is the current market share of GMR Airports Ltd in India's passenger traffic?
GMR Airports Ltd has a cumulative share of 278% in India's passenger traffic
What is the expected growth rate of passenger traffic at GMR Airports Ltd over financial year 2024 - 2027?
Jefferies expects passenger traffic to grow at a Compounded Annual Growth Rate (CAGR) of 11% over financial year 2024 - 2027
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