NSEBrokerage firm Jefferies has initiated coverage on GMR Airports Ltd. with a "buy" recommendation and a price target of ₹100.
It has a cumulative share of 278% in India's passenger traffic.Jefferies expects passenger cap at the Hyderabad airport to increase from 12 million to 34 million.
GMR's Goa Airport is also in the middle of a ramp-up.
Jefferies said that the merger will strengthen GMR's strategic relationship with ADP.Slowdown in air traffic, tariff order delays, adverse regulatory changes are some of the risk factors highlighted by Jefferies for its estimates.Shares of GMR Airports Infra are up 2.4% at ₹89.05.
Over the last 12 months, shares have doubled in value.
NSE
Brokerage firm Jefferies has initiated coverage on GMR Airports Ltd. with a "buy" recommendation and a price target of ₹100. The price target implies a potential upside of 15% from current levels.Jefferies 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.GMR Airports is the largest private airport operator in India and operates two of the busiest airports in the country, which are Delhi and Hyderabad. It has a cumulative share of 278% in India's passenger traffic.Jefferies expects passenger cap at the Hyderabad airport to increase from 12 million to 34 million. 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, 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 is also capitalising on its partnership with global Airport major (ADP) to develop its retail strategy and is also working to consolidate all non-aero businesses under a platform to reduce complexity and leverage economies of scale," the note from Jefferies said.The presence of ADP, both at the strategic and the board level, will help GMR's fund-raising capabilities, project execution and bidding capabilities, according to Jefferies.GMR is in the last leg of simplifying its corporate structure by merging itself with GMR Infra Ltd., the listed entity. Jefferies said that the merger will strengthen GMR's strategic relationship with ADP.Slowdown in air traffic, tariff order delays, adverse regulatory changes are some of the risk factors highlighted by Jefferies for its estimates.Shares of GMR Airports Infra are up 2.4% at ₹89.05. The stock is up 10.6% so far in 2024. Over the last 12 months, shares have doubled in value.
