GMR Infra Shares Set to Soar: Jefferies Initiates Coverage with 15% Upside
GMR Airports Infrastructure Ltd shares may see a 15% upside
Gmr InfraJefferiesAirport InfrastructureStock MarketInvestmentReal Estate NewsMay 27, 2024
GMR Airport is evolving from utility to a retail consumption play and is slated to benefit from the strong air traffic growth outlook, travel retail opportunity, led by top end consumption, upward reset in Aero tariffs and real estate unlocking opportunity, said Jefferies.
Shares of GMR Airports Infrastructure rose more than 3.22 per for the day to Rs 89.72 on Monday, commanding a total market capitalization of more than Rs 55,000 crore.
Airport biz in India has a mixed revenue profile of regulated aero revs, which provides for regulated returns on aero activities and upside potential on non-regulated revenue. The business benefits from rising consumer appetite to spend at Airports. Further, we believe as the mix/profile of travelers grows, the spend per pax at duty free will trend towards the global average, said Jefferies.
GMR Infra is amid the last leg of simplification of the corporate structure to merge GMR Airport Ltd, the existing airport platform, with GIL. The merger would strengthen the strategic relationship with ADP by bringing them to the listed company level and also allow improvement in upstreaming of Airport FCFs, it said.
Further, ongoing simplification of corporate structure, improvement in leverage ratios, ADP's backing will support re-rating. The brokerage expects GMR Infra's ebitda CAGR of 32 per cent over FY24-FY27e. \We value GMR Infra at Rs100, valuing the airport subsidiary at 27 times FY30 EBITDA, discounted at 12 per cent for four years,\ it said.
Jefferies expects PAT positive in FY26 and leverage ratios to moderate, as large capex related to DIAL/GHIAL is behind. \ADP’s presence at strategic and board level will ensure fund-raising capabilities, project execution and bidding capabilities,\ it added with a 'buy' rating with a target price of Rs 100. Jefferies cites slowdown in air traffic, tariff order delays, adverse regulatory changes as key risks.
GMR Airports Infrastructure Ltd is a leading airport infrastructure company in India, with a presence in several airports across the country. The company has been focusing on simplifying its corporate structure and improving its financial performance.
Jefferies is a global investment banking and brokerage firm that provides research and analysis on various stocks and companies. The firm has a strong presence in several countries, including India, and is known for its in-depth research reports and analysis.
Frequently Asked Questions
What is GMR Infra's expected ebitda growth? A: GMR Infra's expected ebitda growth is 32% CAGR over FY24-FY27e Q: What is the target price set by Jefferies for GMR Infra? A: The target price set by Jefferies for GMR Infra is Rs 100 Q: What are the key risks cited by Jefferies for GMR Infra? A: The key risks cited by Jefferies for GMR Infra are slowdown in air traffic tariff order delays and adverse regulatory changes Q: What is the current market capitalization of GMR Airports Infrastructure Ltd? A: The current market capitalization of GMR Airports Infrastructure Ltd is over Rs 55 000 crore Q: What is the expected improvement in GMR Infra's leverage ratios? A: The expected improvement in GMR Infra's leverage ratios is due to the simplification of corporate structure and improvement in financial performance
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