GMR AIRPORTS LIMITED — Q4 FY26

GMR Airports Ltd Q4 FY2025-26 Earnings Conference Call https://www.youtube.com/watch?v=HrnE447Ubj8 Published: 3 weeks ago

0:00 Ladies and gentlemen, good day and welcome to GMR Airports Limited Q4 F526 earnings conference call. This conference call may contain 0:09 9 seconds forward-looking statements about the company which are based on the beliefs, opinions and expectations of the company as on date of this call. These statements are not the guarantees of 0:17 17 seconds future performance and involve risks and uncertaintities that are difficult to predict. As a reminder, all participant lines will be in the listen only mode 0:24 24 seconds and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during the conference call, please signal an operator by pressing start then zero on your touchstone phone. 0:35 35 seconds Please note that this conference is being recorded. I now hand the conference over to Mr. Sorup Java, executive director of finance and strategy. Thank you and over to you Mr. 0:44 44 seconds Jawa. 0:47 47 seconds Thank you and good morning everyone. I'm pleased to present a resilient set of financial and operational results. 0:55 55 seconds However, before turning to the numbers, it is important to acknowledge that the current operating environment continues to be challenging. 1:04 1 minute, 4 seconds The global aviation landscape is currently weathering a complex storm and as a major international airport 1:11 1 minute, 11 seconds operator, we remain watchful of the broader macroeconomic and industry dynamics. 1:18 1 minute, 18 seconds Ongoing geopolitical conflicts have driven a dramatic spike in jet fuel prices with aviation turbine fuel now 1:28 1 minute, 28 seconds consuming 55 to 60% of our airline partners' operating expenses. 1:35 1 minute, 35 seconds This volatility coupled with airspace closures has forced capacity rationalization including temporary international route 1:43 1 minute, 43 seconds suspensions this summer. Consequent fuel search charges have driven up airfares causing a temporary slowdown in immediate passenger traffic. 1:56 1 minute, 56 seconds However, the ecosystem's response has been highly supportive. 2:00 2 minutes To protect the industry's structural health, the government of India and key states have intervened decisively in 2:07 2 minutes, 7 seconds Delhi and Mumbai recently slashing VAT on ATF to 7%. And Ministry of Civil 2:14 2 minutes, 14 seconds Aviation has provided direct relief by cutting domestic landing and parking charges by 25%. 2:23 2 minutes, 23 seconds As an airport operator, our business is built on long-term infrastructure horizons and not single quarter cycles. 2:32 2 minutes, 32 seconds We must separate transient operational friction from India's secular growth drivers which remain intact. 2:40 2 minutes, 40 seconds The structural investment thesis continues to be validated by global authorities. 2:47 2 minutes, 47 seconds The World Travel and Tourism Council's main 26 research reports the global travel and tourism sector to 2:56 2 minutes, 56 seconds outpace the wider economy by 1.5 times over the next decade. 3:01 3 minutes, 1 second Within this global backdrop, India remains a primary growth growth engine driven by an expanding middle class and irreversible infrastructure momentum. 3:13 3 minutes, 13 seconds Consumer appetite and fundamental desire to travel have not diminished. 3:20 3 minutes, 20 seconds The current softening is transitory due to Iran conflict and should not be viewed as a structural decline in demand. 3:29 3 minutes, 29 seconds As management, our strategy is clear. We are navigating the next two quarters with strict discipline, aggressively 3:37 3 minutes, 37 seconds optimizing our non-erotic nautical revenue streams and working closely with airlines to maximize asset utilization. 3:46 3 minutes, 46 seconds Our long-term strategies remain firmly on track because we are building for the next decade of Indian growth, not just next quarter. 3:56 3 minutes, 56 seconds On that note, let me delve into our Q4 fiscal 26 performance. 4:03 4 minutes, 3 seconds Momentum in total income continued with quarter 4 at INR 40.4 billion, up 36% 4:12 4 minutes, 12 seconds yearonear, and fiscal year 26 at INR 152 billion, up 40% yearonear. 4:21 4 minutes, 21 seconds More than 50% of this income has come from non-erero businesses and about third came from the aerob revenue. 4:31 4 minutes, 31 seconds ITA for the quarter grew 38% yearonear to INR 15.5 billion and for the full 4:38 4 minutes, 38 seconds financial year 26A reached a record high 4:42 4 minutes, 42 seconds of INR 61.5 billion up 47% yearonear 4:50 4 minutes, 50 seconds for the quarter came at INR 4 billion versus loss of INR 2.5 billion in 4:57 4 minutes, 57 seconds quarter 4 fiscal 25 importantly ly for fiscal 26 5:03 5 minutes, 3 seconds reported path of INR 472 crores was positive for the first time in over a 5:10 5 minutes, 10 seconds decade consolidated net debt excluding FCCs of INR 28.8 8 billion which are deep in the 5:20 5 minutes, 20 seconds money and will convert into equity stood at INR 340 billion decreasing by INR 4.7 5:28 5 minutes, 28 seconds billion versus quarter 3 fiscal 26 GAL standalone net debt decreased by INR 5:36 5 minutes, 36 seconds 9.4 billion partially offset by increase of INR 4.2 2 billion at Bhapura. 5:45 5 minutes, 45 seconds For fiscal 26, net debt to a bit stood at 5.5x and is poised to go below 4x in next 18 5:53 5 minutes, 53 seconds to 24 months and this shall be in this should be viewed in the backdrop that now we have added Nagpur in the 6:03 6 minutes, 3 seconds portfolio as the government has finally taken the decision. GAL is currently rated A+ by Crystal. 6:12 6 minutes, 12 seconds On the operational front, traffic at GAL operated airports rose 1% year on year in Q4 fiscal 26, reaching 31.7 million passengers. This excludes Jeru. 6:26 6 minutes, 26 seconds Despite multiple disruptions throughout the year, GAL served a record 121.6 6 6:33 6 minutes, 33 seconds million passengers in fiscal 26. 6:38 6 minutes, 38 seconds Total income at Delhi airport rose 23% yearonear to INR 20.2 billion in quarter 6:45 6 minutes, 45 seconds 4 and rose 33% yearonear for the full fiscal 26. 6:52 6 minutes, 52 seconds Aero revenues rose 161% yearonear in fiscal 26 driven by implementation or revised traffic uh tariffs. 7:02 7 minutes, 2 seconds As a result, Eida for quarter 4 was up 42% yearonear to INR 7.5 billion and 7:10 7 minutes, 10 seconds increased 64% yearonear for the full fiscal 26 to a record INR 28.8 billion. 7:20 7 minutes, 20 seconds With this, the airport has reported a profit of INR 1.2 billion for quarter 4 7:26 7 minutes, 26 seconds and INR4.8 8 billion for the full fiscal 26 at Hyderabad. Total income for quarter 4 7:35 7 minutes, 35 seconds was INR 6.2 billion up 5% yearon year and for the full fiscal 26 it was at INR 25.8 8 billion up 10% yearonear. 7:49 7 minutes, 49 seconds Non-error revenues were particularly strong in fiscal 26 up 23% year on year. 7:56 7 minutes, 56 seconds Eida for quarter 4 was up 2% yearon year to INR 3.6 billion and was up 9% yearon 8:05 8 minutes, 5 seconds year to a record INR6.1 billion for full fiscal 26. 8:12 8 minutes, 12 seconds The airport continues to be PAT positive on a quarterly and yearly basis with fiscal year 26 PAT at INR4.3 billion 8:22 8 minutes, 22 seconds versus 1.9 billion in fiscal 25. 8:27 8 minutes, 27 seconds Mopai airport continued [clears throat] its operations with a reported total income of about 1.1 8:36 8 minutes, 36 seconds billion in Q4 down 5% yearon year and INR 4.1 billion for the full fiscal 26 8:44 8 minutes, 44 seconds down 7.7 7% yearon year a revenue declined 12% yearon year due to the 8:54 8 minutes, 54 seconds special incentive program to attract airlines The impact which is already visible in traffic which rose 15% yearonear and 9:03 9 minutes, 3 seconds non-airo revenues which saw a 25% year-on-year growth. 9:10 9 minutes, 10 seconds The airport continues to report positive aida with quarter 4 fiscal 26 at 52 9:18 9 minutes, 18 seconds million rupees and fiscal 26 at INR 1,273 million rupees. 9:27 9 minutes, 27 seconds The notable achievements during the quarter are combined aero yield per packs or YPP in quarter 4 was 434 rupees 9:37 9 minutes, 37 seconds in Delhi, Hyderabad and Mopa and nonrowero income per packs or IP was INR 9:45 9 minutes, 45 seconds 640 and this includes all revenues from non-airo businesses adjusted for revenue 9:52 9 minutes, 52 seconds share paid to air force as well as non-air revenues reported by Delhi, Hyderabad and Mopa airports. 10:00 10 minutes Momentum for our adjacency business is accelerating and as we advance towards our long-term ambition of building GAL 10:08 10 minutes, 8 seconds into a scaled consumer platform firmly supported by the resilience and discipline of our core utility 10:15 10 minutes, 15 seconds operations at Delhi. 10:19 10 minutes, 19 seconds Dutyfree achieved the highest monthly sales in Jan 26 while at Hyderabad 10:26 10 minutes, 26 seconds highest monthly SP was reported for March 26. 10:31 10 minutes, 31 seconds The increased duty-free allowance of rupees 75,000 as announced in the last union budget is now implemented. 10:40 10 minutes, 40 seconds At both these airports, duty-free sales commenced at international lounges at Hyderabad. GAL operationalized phase 10:49 10 minutes, 49 seconds one of new larger duty-free store at departures. 10:55 10 minutes, 55 seconds Moving to cargo, GAL won the cargo terminal one concession which is which it was already operating but on an 11:03 11 minutes, 3 seconds interim basis post the termination of the previous cargo concession at Bogapuram. Work has already begun 11:12 11 minutes, 12 seconds operationalizing the non-erero businesses as soon as the commercial operations at the airport 11:19 11 minutes, 19 seconds commence at Delhi. Pier C in terminal 3, which was earlier a domestic pier, has been 11:27 11 minutes, 27 seconds converted to international, increasing the terminal's international capacity by 50% to 32 million passengers. And this 11:37 11 minutes, 37 seconds is in line with our overall strategy to capture as much of international traffic, which is the high yielding traffic uh going forward. 11:47 11 minutes, 47 seconds operations will commence shortly and we would that will enable us to further expand our nonhero offerings to international passengers. 11:57 11 minutes, 57 seconds Hyderabad airport commissioned the cargo terminal 2 which was initial with an initial annual capacity of 50,000 metric 12:06 12 minutes, 6 seconds tons with a scope of expansion to 100,000 metric tons. The terminal also features a large fully temperature 12:14 12 minutes, 14 seconds controlled pharma zone purpose built for handling pharmaceutical and perishable cargo. 12:23 12 minutes, 23 seconds Construction on multiple airport land development projects is underway at all airports details of which are available in the results presentation. 12:33 12 minutes, 33 seconds Fiscal 27 will see handover of our first self-development commercial building at Delhi Aeros city where the pre-leasing 12:41 12 minutes, 41 seconds discussions are already underway and here I would like to highlight that as articulated many a times in the past 12:49 12 minutes, 49 seconds like we have built our second plat uh second platform of business which is the non-erero business we are very much 12:57 12 minutes, 57 seconds focused on building our third platform which is the real estate development business. 13:03 13 minutes, 3 seconds The MRO business signed an agreement with Boeing India, Boeing India Defense 13:10 13 minutes, 10 seconds to undertake phase 56 heavy maintenance checks for the Indian Navy's P8I 13:17 13 minutes, 17 seconds maritime patrol aircraft [clears throat] fleet, expanding our capabilities into the defense sector. 13:26 13 minutes, 26 seconds Work on the new airport construction is steadily progressing at Bogapuram. 98.7% 13:33 13 minutes, 33 seconds of physical progress has been achieved as of March 26. And we aim to operationalize the Bogapuram airport in 13:41 13 minutes, 41 seconds quarter 2 of the current year much ahead of our original target date of December 26. 13:50 13 minutes, 50 seconds At CIT 69% progress has been achieved as of March 26. 13:56 13 minutes, 56 seconds In line with its responsibility as a leading airport operator, GMA airport efforts is deeply guided by robust ESG 14:06 14 minutes, 6 seconds principles. The ESG slides in the presentation as well as our fiscal 25 sustainability report highlight all our 14:15 14 minutes, 15 seconds initiatives and achievements on this front. 14:19 14 minutes, 19 seconds GMR operated airports and subsidiaries continue to define global benchmarks with leading accolades 14:27 14 minutes, 27 seconds reflecting our relentless pursuit of excellence and innovation. 14:32 14 minutes, 32 seconds These milestones reaffirm our commitment to delivering superior infrastructure and enhancing long-term share stakeholder value. 14:42 14 minutes, 42 seconds In closing, fiscal 26 is not just another milestone, but a testament of the progress we have 14:50 14 minutes, 50 seconds built over the years where our strategic initiatives are now gaining traction shaping GMR airports into a global 14:58 14 minutes, 58 seconds diversified and future ready infrastructure platform. 15:03 15 minutes, 3 seconds The presentation with all financial numbers is already available with you. 15:07 15 minutes, 7 seconds If not, you can download it from the IR section of our website. We are available to respond to your questions on this 15:15 15 minutes, 15 seconds call and offline after the call. And now I would like to open the forum for queries that will be addressed by my 15:23 15 minutes, 23 seconds colleagues and myself from the corporate and the business teams. Thank you. 15:30 15 minutes, 30 seconds Thank you. We will now begin the question and answer session. Anyone who wishes to ask the question may press star and one touch. 15:39 15 minutes, 39 seconds If you wish to remove the cell from the question queue, you may press star and two. Participants are requested to use handsets while asking a question. Ladies 15:46 15 minutes, 46 seconds and gentlemen, we'll wait for a moment while the question Q assembles. 15:53 15 minutes, 53 seconds The first question comes from the line of Mohit Kumar with ICIC securities. Please go ahead. 15:58 15 minutes, 58 seconds Yeah. Uh good good morning sir and thanks for the opportunity and congratulations on a very good year. Uh 16:05 16 minutes, 5 seconds my first question is sir can you please help us with the region in s improvement in share of profit of investment 16:13 16 minutes, 13 seconds accounted for using equity method. uh the particular line item has seen it 16:19 16 minutes, 19 seconds seen a jump from 21 odd cr in Q in Q3 to 161 cr in Q4. 16:32 16 minutes, 32 seconds Yeah. 16:34 16 minutes, 34 seconds Uh this is basically because of the claims received by the CIT airport from government of Greece. This has been 16:42 16 minutes, 42 seconds accounted by the greed airport uh around 62 million and uh after net of taxes the 16:49 16 minutes, 49 seconds proportionate amount of 21% has been taken in our share of profit is around about 100 cr rupes. 16:58 16 minutes, 58 seconds Understood. Uh my second question is sir there's a negative tax item which appearing in Hyderabad airport 17:04 17 minutes, 4 seconds financials uh which is around 97 cr or negative number but while it was positive for last three quarters 17:12 17 minutes, 12 seconds anything there which is exceptional it is not an exceptional as you know that the new tax regime is coming into force this current financial year 17:20 17 minutes, 20 seconds onwards which is now mandatory more or less to all the corporates so Hyderabad airport is now moving from 35% tax 17:29 17 minutes, 29 seconds bracket into 25.17% tax bracket. Accordingly, the entire duffer tax liability which was created 17:37 17 minutes, 37 seconds earlier has been reversed uh to the extent of about 120 crores. 17:41 17 minutes, 41 seconds Understood. Understood. That's very helpful. Um my third question is can you please help the capex number for FY26 17:48 17 minutes, 48 seconds and the expected capex in FY27 across across your various businesses? 17:57 17 minutes, 57 seconds The capex across the businesses in the next financial year 26 27 will be more or less only in case of the Bogapuram 18:06 18 minutes, 6 seconds because other airports are doing only operational capex. Bogapuram will be incurring maybe around 700 to 800 cr rupees to complete the project in 2627. 18:17 18 minutes, 17 seconds And what was what was this number for FI26? FI26 26 FI26 almost around 1,800 crores you were spent. 18:26 18 minutes, 26 seconds This say across various businesses right? Yes. Everything in CWIP. 18:32 18 minutes, 32 seconds Understood sir. Thank you. That's very helpful sir. Thank you. 18:38 18 minutes, 38 seconds Thank you. Next question comes from the line of Nathan Gi with Bank of America. Please go ahead. 18:44 18 minutes, 44 seconds Uh hi sir. Thank you for the call. Maybe uh two questions for me. Uh firstly look the second Noa Delhi airport uh is 18:52 18 minutes, 52 seconds opening soon. uh are you seeing any signs of whether it's cargo or passenger flights being moved over particularly on the cargo side? So that's the first 19:00 19 minutes question. Uh second question is just on Hyderabbad and domestic traffic. So uh April still showing some softening. 19:06 19 minutes, 6 seconds Obviously some of that's probably war related but uh uh if the war ends do you think we could actually start to see some improvement in that traffic when we 19:13 19 minutes, 13 seconds look to winter 2627. So, uh, do you think Indigo could be able to restore flights or have other airlines expressed 19:21 19 minutes, 21 seconds some interest in adding into those slots? Thank you. 19:25 19 minutes, 25 seconds Yeah, thank you for your question. Um, I'll answer your second question first. 19:31 19 minutes, 31 seconds Um, we do expect improvement in in in conditions uh maybe in the second half 19:38 19 minutes, 38 seconds of the current fiscal year. um the current first half is pretty much locked 19:44 19 minutes, 44 seconds in and it has been adversely impacted by uh both airspace closure and also uh the 19:52 19 minutes, 52 seconds conflict uh uh in Iran. So uh but in the second half we do expect uh this to 19:59 19 minutes, 59 seconds improve. Even if we were to achieve uh you know um uh what do you call uh a settlement between the US and Iran uh 20:08 20 minutes, 8 seconds today it'll take uh at least few months for things to normalize. So that is the that is our understanding uh on the 20:16 20 minutes, 16 seconds outlook. Uh the second part is also this happens to be also a lean season. uh so you know we don't expect too much of 20:25 20 minutes, 25 seconds uptick in traffic in the current conditions uh but September onwards I think uh we should be in a much better 20:32 20 minutes, 32 seconds position uh compared to the first half of this year uh coming to uh the second 20:39 20 minutes, 39 seconds airport at NOA uh and uh we don't see any any uh uh you know uh airlines 20:49 20 minutes, 49 seconds switching over or leaving their slot thoughts at Delhi airport and moving to Noida airport. Uh I think uh uh that 20:58 20 minutes, 58 seconds airport will generate its own demand. Uh we have seen because we have operated in another city with with which has two 21:06 21 minutes, 6 seconds airports which is Goa where uh when we came in uh we actually created our own demand and the whole system traffic went 21:13 21 minutes, 13 seconds up. So we do not expect uh uh any cannibalization of uh of uh of demand 21:20 21 minutes, 20 seconds from our airport to Noa airport. uh on the passenger side for sure but on the cargo side there may be some impact uh 21:29 21 minutes, 29 seconds because uh you know that part of the country uh has lots of industries uh which are uh you know more dominated 21:38 21 minutes, 38 seconds towards agri products and also uh automobile uh which may uh you know form 21:45 21 minutes, 45 seconds the bedrock for cargo traffic uh uh to to develop in that part and that uh airport. So beyond that we don't see any 21:54 21 minutes, 54 seconds impact but we are working our our our team members are are pretty much giving uh you know adequate support to uh to 22:03 22 minutes, 3 seconds the industrial houses to ensure that uh you know the traffic uh is is uh continues to be the cargo traffic 22:11 22 minutes, 11 seconds continues to be handled at Delhi airport. So I don't expect any down tick on on on either the passenger or in the cargo business as such. 22:26 22 minutes, 26 seconds Thank you. 22:31 22 minutes, 31 seconds Thank you. Next question comes from the line of Pratik Kumar with Jeff. Please go ahead. 22:38 22 minutes, 38 seconds Yeah. Good morning sir. Uh I have three questions. So firstly on uh your traffic again. Uh so uh I mean based on the 22:48 22 minutes, 48 seconds current situation of macro uh will be uh right to assume like this like in FI26 22:56 22 minutes, 56 seconds we had uh flat to 1% growth uh probably just do slightly better at like maybe 3 to 5% growth in terms of overall traffic 23:04 23 minutes, 4 seconds for the year. Uh again it's difficult to predict but uh uh given first half is like significantly impacted uh for year we should look at like 5% growth soon. 23:17 23 minutes, 17 seconds No absolutely Pratik I think uh we need to keep into perspective that fiscal 26 23:24 23 minutes, 24 seconds had a unfortunate uh accident um you know with Air India uh in Ahmedabad 23:32 23 minutes, 32 seconds which of course uh uh forced Air India to to uh you know get all their uh 23:40 23 minutes, 40 seconds planes uh reinspected under directions from DGCA. Uh so that of course uh had 23:46 23 minutes, 46 seconds an impact on on capacity available uh for travel. Uh and uh and second part is 23:55 23 minutes, 55 seconds that uh you know uh again a black swan event of a of a conflict in the Middle East has impacted uh you know traffic uh 24:04 24 minutes, 4 seconds because it has added about one and a half to two hours of travel time from from uh from India to Middle East by the 24:12 24 minutes, 12 seconds Indian carriers. Uh as you may be aware uh Indian carriers still cannot access Pakistani airspace. That airspace is 24:20 24 minutes, 20 seconds closed. So we have to from Delhi we have to go carriers have to go down a little south and then they they cut across into 24:28 24 minutes, 28 seconds Europe with some you know for technical stopovers in Europe before the flight into North America. So that has impacted 24:38 24 minutes, 38 seconds uh uh you know the traffic. it has impacted uh ticket pricing uh and uh but we believe that uh you know these are 24:46 24 minutes, 46 seconds all transitory in nature so a flat 1% growth going to about 5 to 7% growth for 24:53 24 minutes, 53 seconds the full fiscal year guidance I think uh we are pretty much uh uh uh on there we are pretty confident that we will 25:00 25 minutes achieve uh you also need to keep into perspective that two new airports are also coming uh in our portfolio which 25:08 25 minutes, 8 seconds will go live which will add to the numbers. So, Bhogapuram will commercially open in quarter two uh of 25:16 25 minutes, 16 seconds of this fiscal year and Nagpur is a brownfield airport uh that also uh 25:23 25 minutes, 23 seconds contribute start contributing in in fiscal uh in in quarter 2. So these will 25:29 25 minutes, 29 seconds add to the traffic but from an existing portfolio perspective I think uh it's reasonable to assume uh a 5 to 7% growth overall. 25:42 25 minutes, 42 seconds Sure. on Hyderabad uh traffic has been reeling like for past uh four months. Uh 25:49 25 minutes, 49 seconds I know you would have like lost some traffic uh to other cities or uh how should we look at like uh port section here in this market? 26:01 26 minutes, 1 second I think uh uh you know Hyderabad and people usually compare Hyderabad and Bangalore and I think Hyderabad's pace 26:11 26 minutes, 11 seconds of growth was far higher compared to uh other airports including Bangalore. uh it's a process of normalization and 26:19 26 minutes, 19 seconds rationalization that the airlines are taking uh which are which are pretty much normal in their in their planning 26:28 26 minutes, 28 seconds process and and you know our uh planning uh goes pretty much uh you know in line 26:35 26 minutes, 35 seconds with their planning. So uh uh not much to worry about it. It's just getting things are getting only rationalized and 26:42 26 minutes, 42 seconds normalized there. So if you look at last year uh or or last two years, Hyderabad galloped much much faster than the other airports. 26:56 26 minutes, 56 seconds Okay. And third question on uh GAL platform. Uh so we added like major businesses on duty free and cargo in FI26. 27:06 27 minutes, 6 seconds uh what do you think uh like we should be looking forward what we should look forward to uh for FI27 and 28 in terms 27:14 27 minutes, 14 seconds of incremental uh growth opportunities which can add growth uh to the platform business. 27:22 27 minutes, 22 seconds So for uh for the non-ero platform business I'll ask my colleague Rajes to actually pitch in. But broadly what I 27:30 27 minutes, 30 seconds would like to highlight to you is that our strategy of of creating a platform from non-airero is now reflecting in 27:38 27 minutes, 38 seconds numbers. Uh nonairero platform numbers are now higher than Hyderabad airport 27:44 27 minutes, 44 seconds numbers. Okay. And and so you need to appreciate the strategy where with least 27:53 27 minutes, 53 seconds capital employed we are creating revenue and earnings but on an overall basis uh 28:01 28 minutes, 1 second what the outlook is I'll just uh allow Rajes to uh to to give his uh perspective there. 28:08 28 minutes, 8 seconds Thanks. Thanks. Yeah. So Pritik uh FI271 Bogapuram will become operational. So 28:16 28 minutes, 16 seconds link to that will be the non arrow businesses which are part of gal platform. So those will get added as we 28:24 28 minutes, 24 seconds you know we just sort of just mentioned we got Nagpur airport. We'll also be looking for uh nonarrow related 28:31 28 minutes, 31 seconds opportunities in Nagpur. We are also evaluating uh uh few opportunities outside of GMR but it is too early to even talk about that at this stage. 28:41 28 minutes, 41 seconds We'll let you know once we reach a certain stage of uh but our endeavor is to uh get know as many businesses as we 28:50 28 minutes, 50 seconds can get from our own airports plus also actively looking at opportunities outside of uh GMR airports. 28:58 28 minutes, 58 seconds So uh uh just to also add to what Rajesh is saying I think uh you know when we were creating this platform we were 29:05 29 minutes, 5 seconds looking at a secular growth uh in the business uh of anything of 17 18%. 29:12 29 minutes, 12 seconds Correct me if I'm wrong uh Rajes. Uh and uh we believe that organically with the 29:19 29 minutes, 19 seconds existing uh you know businesses will continue to grow uh with that kind of uh uh CAGR. 29:28 29 minutes, 28 seconds Yes sir, you're right. We are looking at upward of 15 16% of uh growth year on year. Thank you. 29:37 29 minutes, 37 seconds Uh one last question on your Hyderabad Paris. uh we have signed for we have tried for that tariff multi-year proposal. 29:46 29 minutes, 46 seconds What is the stage there and how should we look at tariff for 27 28 in the next six period? 29:56 29 minutes, 56 seconds The tariff application was already filed in last financial year and u the arai is at active stage of 30:04 30 minutes, 4 seconds considering the application. We are expecting the tariffs should come in the third quarter of this financial year and 30:12 30 minutes, 12 seconds the tariffs of course the we can't give exactly the number but the tariffs will be much better than the current tariffs. 30:24 30 minutes, 24 seconds Sure. Uh I'll get back to you. Thank you. 30:29 30 minutes, 29 seconds Thank you. Next question comes on the line of Karthik Chalapa with Indis Capital. Please go back. 30:39 30 minutes, 39 seconds Thank you for the opportunity sir and congrats on the quarter. So I have uh three questions. 30:44 30 minutes, 44 seconds Mr. Chalapa, sorry for interrupting. Uh we cannot hear you. Can you speak a little louder? Okay. Is this any better? No. 30:51 30 minutes, 51 seconds No. Uh okay. Are you able to hear me now? 30:59 30 minutes, 59 seconds Yeah, a little better than before. Please continue. Thank you. 31:02 31 minutes, 2 seconds Okay, great. Uh so congrats on the quarter. So I just had three quick questions. The first one is if I were to look at the Delhi airport nonarrow 31:10 31 minutes, 10 seconds revenue group this quarter it was a bit soft. So apart from you know the geopolitical developments and the airspace restrictions was was there any 31:18 31 minutes, 18 seconds other factors or so which impacted that growth and when can we expect to see some sort of recovery in that particular revenue item? 31:30 31 minutes, 30 seconds Rajes. 31:32 31 minutes, 32 seconds Yeah. So, uh you know I think when you look at the nonrow absolute uh volume and growth uh you know since the traffic 31:41 31 minutes, 41 seconds growth has been suboptimal so that also reflected in the overall nongo revenue growth and then secondly there were 31:50 31 minutes, 50 seconds couple of uh waiverss which were pertaining to earlier period those have also been uh accounted for. So net 31:58 31 minutes, 58 seconds impact of that but if you see in terms of our SP uh growth for uh non arrow it 32:06 32 minutes, 6 seconds has been uh in this quarter has been in the range of about 5% or so uh which is again you know we generally look at uh 7 32:13 32 minutes, 13 seconds to 8% SP growth so if you see it in that light yes it is slightly lower than what we generally uh achieve uh but but for 32:22 32 minutes, 22 seconds these two reasons which I just mentioned in case of Delhi export the in case of 32:29 32 minutes, 29 seconds non-error revenues there was some reversal of about 23 crores of the cargo 32:36 32 minutes, 36 seconds strike lining of the deposits that has impacted otherwise the growth was normal. Uh there are certain reversals 32:44 32 minutes, 44 seconds which have to happen that have been taken place. 32:50 32 minutes, 50 seconds Okay. Excellent. Uh my second question sir is on Hyderabad. uh we already talked about uh the softness in the traffic for the fourth quarter as well 32:59 32 minutes, 59 seconds as some of that also in in April. Uh but if I look at the absolute ebita growth this quarter that has also been soft 33:07 33 minutes, 7 seconds which has resulted in some level of margin compression. So if we are uh if we are expecting the normalization to happen in the second half of this year. 33:18 33 minutes, 18 seconds So can we then say that in the first half the margins at Hyderabad airport will still be rangebound and somewhat 33:25 33 minutes, 25 seconds under pressure simply because the volume is yet to normalize whereas the costs are sticky. So would that be like a reasonable inference? 33:34 33 minutes, 34 seconds No. So generally your comment would be accurate. Uh but as uh know we are also 33:41 33 minutes, 41 seconds able to control uh our costs quite effectively. Um but from a from a from a guidance perspective I would say that 33:49 33 minutes, 49 seconds the uh first half of the year will be softer uh and and it'll recover in the 33:57 33 minutes, 57 seconds second half. So uh from a general uh comment of yours I would I would align with that. 34:04 34 minutes, 4 seconds Okay. Excellent. My last question sir is if you were to look at our net debt uh it has it has seen some moderation quarter on quarter and uh most of that 34:13 34 minutes, 13 seconds has actually come at the gal standalone level now that bohakuram will be operational let's say in two quarters down the line and we really uh don't 34:22 34 minutes, 22 seconds have a lot of capex lined up for fi27 can we assume that the net projectoring from here on will actually be on a 34:30 34 minutes, 30 seconds downward trend no in the 627 still Bogapuram capex the 34:38 34 minutes, 38 seconds the final payments will come up which will be around 700 to 800 cr rupees. So to that extent debt will go up because 34:45 34 minutes, 45 seconds the entire equity infusion was already completed and uh other than that maybe a little 34:52 34 minutes, 52 seconds debt may come up in case of the N. So other than these two there are no further debt rising. 34:59 34 minutes, 59 seconds So we can assume about 700 800 crores of the final payments of Bhapuram to hit 35:06 35 minutes, 6 seconds the books and about 200 odd crores uh coming for Nagpur. So about 1,000 odd 35:14 35 minutes, 14 seconds crores in in total debt will go up and uh and uh of course there'll be some mandatory uh debt payments that are 35:23 35 minutes, 23 seconds happening uh that will adjust for the downward slope. 35:28 35 minutes, 28 seconds But I think the key I think the key key thing that you really need to look at is what is my net debt to a beta number. 35:36 35 minutes, 36 seconds That is the metric that you have to follow more accurately than absolute number of debt. 35:45 35 minutes, 45 seconds Okay. Great. Uh and sir uh just uh on uh you mentioned that for Delhi airport your international passenger capacity has now gone up by about 50 odd% to 35:54 35 minutes, 54 seconds about 32 million. like how many years of demand do you think this can cater to just uh if you were to hazard a guess 36:01 36 minutes, 1 second without an explicit guidance because right now I think we're doing about 21 22 million I'm just trying to see whether how many years of demand can this actually service before the next 36:10 36 minutes, 10 seconds phase of expansion so this will capture uh for the next four to five years of the uh 36:18 36 minutes, 18 seconds international traffic growth by that time then we will able to see whether any additional capacitors to created but this will take care of next 3 to four 36:27 36 minutes, 27 seconds years requirement of international traffic to okay okay that's all from my side sir 36:35 36 minutes, 35 seconds thank you very much and wish you and the team all the very best yeah just just to add to what GRK go highlighted I think we are very well 36:43 36 minutes, 43 seconds covered for next 5 years uh but we the way the design of the airports have also happened there's a lot of flexibility 36:50 36 minutes, 50 seconds available so uh uh you know as you are aware There are strategies to to capture more and more of international traffic. 36:59 36 minutes, 59 seconds It helps in our non-arob business. Uh if some capex needs to be incurred after four five years to convert uh any 37:08 37 minutes, 8 seconds particular part of the terminal or pier into an international one uh will be undertaken. 37:15 37 minutes, 15 seconds Excellent. Okay. This is perfect. Thank you sir. Thank you very much and wish the team all the very best. That's all from me sir. Thank you. 37:27 37 minutes, 27 seconds Thank you. Next question comes from the line of Katit Chinawat with City Group. Please go ahead. 37:36 37 minutes, 36 seconds Hi, congratul for such a a strong result. I have um four questions um half of them being maintenance. Um uh firstly 37:44 37 minutes, 44 seconds I would like to follow up on the associate uh uh jump. You mentioned that about 1 billion rupee uh came from 37:52 37 minutes, 52 seconds claims from the Greece government on credit airport. Uh can you please uh further uh elaborate uh what claim is 37:59 37 minutes, 59 seconds that for and even if I take away uh 1 billion rupee uh the remaining 600 38:07 38 minutes, 7 seconds 20 million is still quite a sizable uh quarter and quarter jump. What's that driven by? Is it like by advertising revenue or something like that? Let's 38:15 38 minutes, 15 seconds let's start with that uh first question is that thank you. 38:20 38 minutes, 20 seconds Um in case of the crit as you know the the the concession uh the construction period 38:28 38 minutes, 28 seconds has to be extended by 2 years due to the covid. So it is a forced measure and uh the airport has made a claim on the 38:37 38 minutes, 37 seconds government for the loss of profit for the two financial years 25 calendar year and 26 calendar year. So accordingly the 38:45 38 minutes, 45 seconds government of Greece has considered the claim for the entire calendar year of 25 is about€62 million but they have 38:54 38 minutes, 54 seconds already dispersed for about 6 months claim that has already been received. So considering that 62 million claim which 39:02 39 minutes, 2 seconds has already been accounted for in the books by the crit company after net of taxes because this will come as an 39:09 39 minutes, 9 seconds income and on that taxes have to be paid around about 25% net of tax the balance amount is again distributed among the 39:18 39 minutes, 18 seconds shareholders and GMR holds about 21.6% stake so that translates into around 100 39:25 39 minutes, 25 seconds cr rupees as our share of profit. Is it clear? 39:31 39 minutes, 31 seconds Yep, that part is clear. And uh next is um such a strong u excluding that amount uh it's still quite a strong Q on Q 39:39 39 minutes, 39 seconds increase. Uh what is it driven by? Thank you. 39:46 39 minutes, 46 seconds Uh beyond international JVS, we also have JVS in Dal and Hyderabad Delhi airport and Hyderabad airport. So this 39:53 39 minutes, 53 seconds remaining uh what you're talking about is with respect to the Delhi airport and Hyderabad airport especially if you look at daily airport the big ones is 40:02 40 minutes, 2 seconds advertising and also uh you know that cargo was there for some time so all those are also accounted for in this the 40:09 40 minutes, 9 seconds difference what you're talking about similarly in Hyderabad also some some amount is there 40:16 40 minutes, 16 seconds all these are JB uh ownerships okay that's very 40:23 40 minutes, 23 seconds Thank you. Um, next question is on um, Hyerabot tariff. I think about a year ago I I asked the management and you 40:31 40 minutes, 31 seconds mentioned that um, because there's not that much capex at Hyerabot uh, we should be expecting close to flat um, 40:40 40 minutes, 40 seconds uh, tariffs heading into the the next regulatory uh, period. Uh, what has changed that that led to uh, upward 40:48 40 minutes, 48 seconds guidance in in the uh, passenger service charges of Hyderabad? Thank you. 40:55 40 minutes, 55 seconds I think we have already explained in the [clears throat] last call that Hyderabad airport has filed an application for the 41:02 41 minutes, 2 seconds tariff determination for this current control period considering even the expansion because the Hyderabad airport 41:10 41 minutes, 10 seconds has built 34 million capacity which is almost full. It is operating. So we have already considered 41:18 41 minutes, 18 seconds presented to the regulator that there will be an expansion on northern side of the airport. So considering that 41:25 41 minutes, 25 seconds expansion capex also included of course the benefit of this expansion may not come full amount because the expansion 41:32 41 minutes, 32 seconds will get completed by 3132 but small amount of some portion of that expansion benefit also is expected to 41:40 41 minutes, 40 seconds get in the tariff determinations. That is one point. The second point is in the third control period in Hyderabad 41:47 41 minutes, 47 seconds airport if you look at it the regulator has postponed around 600 cr rupees of the revenue to the fourth control period 41:56 41 minutes, 56 seconds that 600 cr rupes on NPV basis about 1,000 cr rupes additional revenue Hyderabad airport is entitled which 42:03 42 minutes, 3 seconds regulatory is going to consider that will also add additional revenue additional packs per yield per pack. So 42:10 42 minutes, 10 seconds these are the two factors which we are considering that there will be improvement in the yield per pack in case of hyderabad. 42:20 42 minutes, 20 seconds Okay, that's clear. Thank you. And and last uh last two questions on a book porum um how much um jump in 42:28 42 minutes, 28 seconds depreciation um and amotization per year uh we can expect and the last questions is um can you please elaborate more on 42:37 42 minutes, 37 seconds uh where where's the uh why this quarter we have such a large tax credit. Thank you. 42:44 42 minutes, 44 seconds So in case of the Bogarum airport the entire project cost which we have already explained is about 47 billion INR. 42:54 42 minutes, 54 seconds Uh the depreciation will be on an average around 4 to 5% is about 200 cr rupes will be the depreciation in case 43:01 43 minutes, 1 second of the Bogapura airport. But since it is going to be operating only for about 3/4 the depreciations could be around 130 to 43:10 43 minutes, 10 seconds 150 cr rupes as far as the Bogram airport is concerned. 43:15 43 minutes, 15 seconds So regarding the tax credit which we have taken in case of Hyderabad is a basically reversal of the deferred tax 43:22 43 minutes, 22 seconds liability created because when the tax provisions were at 35% we have kept creating the tax liability for future 43:30 43 minutes, 30 seconds years. Since the tax rates have come down from 35% to 25.17% there was no need to keep that liability 43:39 43 minutes, 39 seconds to that extent we have reversed which is about 120 cr rupes in case of Hyderabad. 43:48 43 minutes, 48 seconds Okay that's very clear. Thank you. 43:55 43 minutes, 55 seconds Thank you. Next question comes from the line of Ankitasha Capital. Please go ahead. 44:02 44 minutes, 2 seconds Yeah, thank you for the opportunity. Uh firstly sir, uh how much traffic can be 44:09 44 minutes, 9 seconds added by Mugapuram and Nagpur and then X of that how much our poor portfolio can 44:16 44 minutes, 16 seconds grow which gives us better clarity on the five six% growth for the full year number that you are targeting. I just 44:24 44 minutes, 24 seconds want to see how much new airports can add and how much our existing portfolio can grow grow in terms of traffic. 44:31 44 minutes, 31 seconds As far as the Bogaf is concerned, the Bayak airport is handling around 2.95 million. So if you consider the 9 months 44:41 44 minutes, 41 seconds period, we can expect around 2.25 25 million uh minimum but we are expecting better growth because the Wisag airport 44:50 44 minutes, 50 seconds doesn't have in the night landings and the takeoffs so we are expecting a better traffic maybe better than 2.25 25 44:58 44 minutes, 58 seconds million for a period of 9 months. In case of the uh Nagpur which is also 45:04 45 minutes, 4 seconds operating around 2.9 million traffic. So if we are going to take over in the third quarter I think second quarter we 45:13 45 minutes, 13 seconds are going to take over this current financial year. So then we will be operating around 2.25 million uh on 45:20 45 minutes, 20 seconds yearly basis for the remaining 9 months period. So both put together will be around five million around 5 million 45:29 45 minutes, 29 seconds will be adding to the traffic in addition to the natural growth in Delhi and Hyderabad. 45:38 45 minutes, 38 seconds Also the tariff orders are in place for both Bogapuram. 45:43 45 minutes, 43 seconds In case of Bogapuram tariff application has already been filed. We are uh the now the as per the latest guidelines 45:50 45 minutes, 50 seconds issued by the regulator they will release the full tariff only after the assets have been fully 45:58 45 minutes, 58 seconds capitalized and financial results are available. So we are expecting find of this month or before starting of 46:05 46 minutes, 5 seconds operations and ado tariff from the regulator which will be around 75% of 46:11 46 minutes, 11 seconds the expected full tariff. So that is in case of the uh Bapur airport since we 46:18 46 minutes, 18 seconds have already filed application we can uh expect that ADOC tariff before starting of the operations. As far as the Nagpur 46:26 46 minutes, 26 seconds is concerned it has already got an existing tariffs that will be continued for some time till we finalize the 46:33 46 minutes, 33 seconds master plan and file the application with the regulator for the tariff determination. 46:40 46 minutes, 40 seconds Got it. uh also if you mentioned uh about the growth in the real estate uh segment as well. So are we looking at 46:48 46 minutes, 48 seconds any capeex uh for you know developing the real estate on our own? 46:56 46 minutes, 56 seconds So we are doing few projects uh uh already uh maybe ammon you can just highlight uh you know what is the 47:04 47 minutes, 4 seconds current uh capex plan there for the current year. 47:09 47 minutes, 9 seconds The next business plan of course will be in the future. 47:12 47 minutes, 12 seconds So currently in Delhi there are three projects uh that are under development. 47:16 47 minutes, 16 seconds We have uh a hotel project pre-leas east leased to chalet uh 400 keys. That hotel 47:24 47 minutes, 24 seconds uh uh building will uh be ready for handover this financial year. There is a 47:32 47 minutes, 32 seconds office building in a city which is also under development scheduled for completion towards the end of this year. 47:38 47 minutes, 38 seconds Uh and then there is a hospital project uh which has just started uh again a a 47:46 47 minutes, 46 seconds building lease uh to a client. That project uh is about a million square ft total builtup area uh and has very 47:54 47 minutes, 54 seconds recently just started construction 3 weeks ago. Uh as far as the capex layout 48:01 48 minutes, 1 second uh we expect total capex uh in this this financial year to be about 450 crores. 48:11 48 minutes, 11 seconds Okay. So bugapuram npur and the real estate put together could be around 48:18 48 minutes, 18 seconds 1,400 crores of capex 10 of this year 27. Yeah, broadly. Yes. 48:28 48 minutes, 28 seconds But just to but just to just to again highlight that these are all fully funded through construction finance. So 48:34 48 minutes, 34 seconds it doesn't impact my my cash flows and they're on to SPV. So 48:43 48 minutes, 43 seconds uh sir, any update on the arbitration going on for uh Delhi airport tariff revision? 48:51 48 minutes, 51 seconds As for the tariff revision uh uh the arbitration is not for a tariff revision. The arbitration was for the 48:59 48 minutes, 59 seconds math payment but the matter is now pending before the uh bench of the high court. uh as far as that math issue is 49:06 49 minutes, 6 seconds concerned and regarding other habit 49:13 49 minutes, 13 seconds is before the Supreme Court expecting the start hearing after the uh the summer holidays maybe uh around the end of the June. 49:26 49 minutes, 26 seconds And uh last one um recently group ADP sold stake uh in the company which was 49:32 49 minutes, 32 seconds taken up by GMR promoters. Now what is the thought process uh going forward on 49:39 49 minutes, 39 seconds uh this stake ownership also uh any uh when will the FCC conversion for uh ADP's shareholding happen? 49:51 49 minutes, 51 seconds So I think uh ADP's press release is is quite clear. They have indicated that uh 49:59 49 minutes, 59 seconds post this current uh stub of sale of about 7.3 uh% stake in GAL uh they do not 50:07 50 minutes, 7 seconds contemplate any further uh stake sale uh in the in the near future. 50:14 50 minutes, 14 seconds uh on the FCCBs uh the promoters who had a call option to to purchase the FCCBs 50:22 50 minutes, 22 seconds which were originally scheduled uh to be purchased in March of 28 50:29 50 minutes, 29 seconds uh is now uh going to be purchased by March of 27. 50:35 50 minutes, 35 seconds The conversion of these FCCBs will happen in its scheduled time in March of 50:41 50 minutes, 41 seconds uh 208 only. So that is the nothing has changed on that front. Uh sir can I take one last one? 50:52 50 minutes, 52 seconds Sure go ahead. What uh what could be the impact of u uh UDF and landing fee uh 50:59 50 minutes, 59 seconds reduction for this quarter that has been u uh advised by the uh airport authority 51:07 51 minutes, 7 seconds of India could be the impact of that for this quarter. Yeah, the the basically the order has been issued by the regulator 51:16 51 minutes, 16 seconds era uh at the directions of the ministry of civil aviation. This reduction in the 51:23 51 minutes, 23 seconds uh landing charges by 25% is only for domestic uh uh movement but not for the 51:30 51 minutes, 30 seconds international the total impact is not more than about 50 cr rupes on yearly 51:36 51 minutes, 36 seconds basis. uh for the one quarter will be about 15 to 20 cr rupees maximum. 51:44 51 minutes, 44 seconds However, this amount will get up in the next control period. So there will not be any loss to the company. 51:51 51 minutes, 51 seconds So it's only a cash flow impact. It is it is no impact on return on equity which gets stowed up in the next tariff period. 52:00 52 minutes Thank you. Cycle. Thank you. 52:08 52 minutes, 8 seconds Thank you. A reminder to all the participants that you may press star and one to ask a question. Next question 52:15 52 minutes, 15 seconds comes from the line of satil subnness with helioscap. Please go ahead. Yeah. Um thank you for the opportunity. 52:23 52 minutes, 23 seconds Just one question from my side. So when I see your result presentation on slide 20, I see uh significant eliminations made in your AIDA composition uh in Q4. 52:37 52 minutes, 37 seconds So could you please provide some color on these eliminations? 52:42 52 minutes, 42 seconds So sir in case of the elimination basically the for example gal has paid remission to the dial that will get 52:50 52 minutes, 50 seconds eliminated because consolidated number and Hyderabad is duty-free earlier paid to the Hyderabad airport they get eliminated. 52:59 52 minutes, 59 seconds So any inter company payments which have happened will get eliminated. For example the dividend which we have received from Hyderabad airport nearly 53:08 53 minutes, 8 seconds 200 cr rupes that get eliminated in the console. So these are all elimination which are intercompulate transactions under the console numbers. 53:18 53 minutes, 18 seconds Okay, that was helpful. Thank you for that. Thank you. 53:27 53 minutes, 27 seconds A reminder to all the participants that you may press star and one to ask a question. 53:34 53 minutes, 34 seconds Ladies and gentlemen, due to time constraints, we have reached the end of question and answer session. I now hand the conference over to Mr. Sorov Chavla for closing comments. 53:44 53 minutes, 44 seconds Yeah, thank you everybody for attending this uh quarterfall annual uh results call. Uh you know we are available for any further queries that you may have. 53:56 53 minutes, 56 seconds You can meet send emails or talk to the IR team. Uh we'll be happy to answer any of your queries. Thank you so much. 54:09 54 minutes, 9 seconds Thank you on behalf of GMR Airports Limited. That concludes this conference. Thank you for joining us.