Target: ₹99
CMP: ₹98.65
GMR Airport has received the new tariff order for its Hyderabad airport, which contributes 27 per cent to its total airport traffic.
The new tariff order provides clarity on aero tariffs for the next five years (FY27–31). It has approved yield per pax of ₹426 (marginally lower than the prior control period). It has also allowed a differential aero tariff for the same period.
As a result, we estimate aero charges per pax in FY27E to remain similar as in FY26.
The flat tariff is lower than initial expectations of a hike in the new control period. Also, the aero tariffs do not consider the capex likely to be incurred in the control period. Note that aero charges consist of landing charges and parking charges; user development fee; and cargo handling.
With embarking and disembarking UDF now both levied and VTP tying incentives to traffic growth, revenue growth hinges on passenger traffic.
We maintain Hold with an unchanged target price of ₹99.
Upside risks: Improved duty-free sales at Delhi and Hyderabad airports; improved non-aero revenue across the airport portfolio.
Downside risks: muted traffic growth; delay in the improvement of non-aero revenue; and a rise in competition for Delhi Airport from Jewar Airport in Noida (Uttar Pradesh).