Q1 2027 GMR Airports Ltd Earnings Call

August 13, 2026

Speaker #1: Ladies and gentlemen, good day and welcome to the GMR Airports Limited conference call to discuss Q1 FY2027 results. As a reminder, all participant lines will be in the listen-only mode, and there will be an opportunity for you to ask questions after the presentation concludes.

Operator: Ladies and gentlemen, good day, and welcome to the GMR Airports Limited conference call to discuss Q1 FY 2027 results. As a reminder, all participant lines will be in the listen-only mode, 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 star then zero on your touchtone phone. Please note that this conference is being recorded. We have with us today Mr. Saurabh Chawla, Executive Director of Finance and Strategy. Before we begin, I would like to state that some of the statements made in today's discussion may be forward-looking in nature and may involve risk and uncertainties. Also, recording or transcribing of this call without prior permission of the management is strictly prohibited. I now hand the conference over to Mr. Saurabh Chawla for opening remarks.

Speaker #1: Should you need assistance during the conference call, please signal an operator by pressing Start, then 0 on your touchstone phone. Please note that this conference is being recorded.

Speaker #1: We have with us today Mr. Saurabh Chawla, Executive Director, Finance and Strategy. Before we begin, I would like to state that some of the statements made in today's discussion may be forward-looking in nature, and may involve risk and uncertainties.

Operator: We have with us today Mr. Saurabh Chawla, Executive Director of Finance and Strategy. Before we begin, I would like to state that some of the statements made in today's discussion may be forward-looking in nature and may involve risk and uncertainties. Also, recording or transcribing of this call without prior permission of the management is strictly prohibited. I now hand the conference over to Mr. Saurabh Chawla for opening remarks. Thank you, and over to you, sir.

Speaker #1: Also, recording or transcribing of this call without prior permission of the management is strictly prohibited. I now hand the conference over to Mr. Saurabh Chawla for opening remarks.

Speaker #1: Thank you, and over to you, sir.

Operator: Thank you, and over to you, sir.

Speaker #2: Thank you, and good morning, everyone. I'm delighted to begin this by sharing a significant milestone in our journey. GMR Airports Family has further expanded with the addition of Nagpur Airport and Bhogapuram International Airport to our operating portfolio.

Saurabh Chawla: Thank you, and good morning, everyone. I am delighted to begin this by sharing a significant milestone in our journey. GMR Airports family has further expanded with the addition of Nagpur Airport and Bhogapuram International Airport to our operating portfolio. We assumed operations of Nagpur Airport on 25 June, while Bhogapuram was inaugurated by the Honorable Prime Minister of India on 1 August and is scheduled to commence commercial operations on 17 August. Notably, all scheduled commercial passenger operations currently handled at existing Visakhapatnam Airport will transition to Bhogapuram, creating a new aviation gateway for North Andhra Pradesh. Bhogapuram is particularly special for us. Completing a greenfield airport of this scale ahead of schedule reflects the strength of our execution capabilities, deep operational expertise, and the commitment of our teams.

Speaker #2: We assumed operations of Nagpur Airport on 25 June, while Bhogapuram was inaugurated by the Honorable Prime Minister of India on 1 August, and is scheduled to commence commercial operations on 17 August.

Speaker #2: Notably, all scheduled commercial passenger operations currently handled at existing Visakhapatnam Airport will transition to Bhogapuram creating a new aviation gateway for North Andhra Pradesh.

Saurabh Chawla: Notably, all scheduled commercial passenger operations currently handled at existing Visakhapatnam Airport will transition to Bhogapuram, creating a new aviation gateway for North Andhra Pradesh. Bhogapuram is particularly special for us. Completing a greenfield airport of this scale ahead of schedule reflects the strength of our execution capabilities, deep operational expertise, and the commitment of our teams.

Speaker #2: Bhogapuram is particularly special for us, completing a greenfield airport of the scale ahead of schedule reflects the strength of our execution capabilities. Deep operational expertise and the commitment of our teams.

Speaker #2: While the sector is navigating through the challenges arising from the geopolitical developments in the Middle East, as well as in Ukraine and Russia, we continue to believe that the long-term fundamentals of air travel remain exceptionally strong.

Saurabh Chawla: While the sector is navigating through the challenges arising from the geopolitical developments in the Middle East as well as in Ukraine and Russia, we continue to believe that the long-term fundamentals of air travel remain exceptionally strong. The International Air Transport Association, IATA, projects Asia Pacific passenger traffic to increase from approximately 1.7 billion passengers in 2024 to 4.1 billion passengers by 2044, with India expected to remain one of the most important contributors to this growth. Importantly, the vision of transforming India into a global aviation hub is no longer a future aspiration. It has already begun to take shape.

Speaker #2: The International Air Transport Association (IATA) projects Asia-Pacific passenger traffic to increase from approximately 1.7 billion passengers in 2024 to 4.1 billion passengers by 2044, with India expected to remain one of the most important contributors to this growth.

Speaker #2: Importantly, the vision of transforming India into a global aviation hub is no longer a future aspiration; it has already begun to take shape. On the aviation business perspective, Air India has launched its hub-and-spoke strategy with Delhi Airport as country's first operational hub.

Saurabh Chawla: Importantly, the vision of transforming India into a global aviation hub is no longer a future aspiration. It has already begun to take shape. On the aviation business perspective, Air India has launched its hub-and-spoke strategy with Delhi Airport as country's first operational hub, enabling passengers from cities such as Varanasi and Amritsar to complete check-in and immigration formalities at their origin airport and seamlessly connect to international destinations through Delhi.

Saurabh Chawla: On the aviation business perspective, Air India has launched its hub-and-spoke strategy with Delhi Airport as country's first operational hub, enabling passengers from cities such as Varanasi and Amritsar to complete check-in and immigration formalities at their origin airport and seamlessly connect to international destinations through Delhi. In fact, the Delhi State Government's decision to reduce VAT on ATF from 25% to 7% with effect from 16 May is proving a level playing field for Delhi Airport, aiding the envisioned hub strategy. At the same time, Indian carriers are entering a new phase of international expansion, with Air India set to restore most of its international services from 1 September, while IndiGo and other airlines are expanding their international operations and fleet size.

Speaker #2: Enabling passengers from cities such as Varanasi, Anamritsar to complete check-in and immigration formalities at their origin airport and seamlessly connect to international destinations through Delhi.

Speaker #2: In fact, the Delhi State Government's decision to reduce VAT on ATF from 25% to 7% with effect from 16 May is proving a level playing field for Delhi Airport, aiding the envisioned hub strategy.

Saurabh Chawla: In fact, the Delhi State Government's decision to reduce VAT on ATF from 25% to 7% with effect from 16 May is proving a level playing field for Delhi Airport, aiding the envisioned hub strategy. At the same time, Indian carriers are entering a new phase of international expansion, with Air India set to restore most of its international services from 1 September, while IndiGo and other airlines are expanding their international operations and fleet size.

Speaker #2: At the same time, Indian carriers are entering a new phase of international expansion, with Air India set to restore most of its international services from September 1, while IndiGo and other airlines are expanding their international operations and fleet size.

Speaker #2: These developments are creating a powerful multiplier effect. For airport operators, particularly the hub airports, as growth extends beyond passenger volumes, into the non-aeronautical revenue streams and commercial land development.

Saurabh Chawla: These developments are creating a powerful multiplier effect for airport operators, particularly the hub airports, as growth extends beyond passenger volumes into the non-aeronautical revenue streams and commercial land development. On that note, let me now delve into our Q1 performance. Momentum in total income continued with Q1 at INR 40.8 billion, up 23% year on year. More than 50% of this income came from non-aero businesses, and about a third also came from the aero revenue. EBITDA for the quarter grew 22% year on year to INR 15.7 billion. PAT for the quarter came at INR 1.5 billion versus a loss of INR 1.4 billion in Q1 of fiscal 2026. Reported quarterly PAT has remained positive for the fourth consecutive quarter.

Saurabh Chawla: These developments are creating a powerful multiplier effect for airport operators, particularly the hub airports, as growth extends beyond passenger volumes into the non-aeronautical revenue streams and commercial land development. On that note, let me now delve into our Q1 performance. Momentum in total income continued with Q1 at INR 40.8 billion, up 23%year-on-year. More than 50% of this income came from non-aero businesses, and about a third also came from the aero revenue. EBITDA for the quarter grew 22%year-on-year to INR 15.7 billion. PAT for the quarter came at INR 1.5 billion versus a loss of INR 1.4 billion in Q1 of fiscal 2026. Reported quarterly PAT has remained positive for the fourth consecutive quarter.

Speaker #2: On that note, let me now delve into our Q1 performance. Momentum in total income continued, with Q1 at INR 40.8 billion, up 23% year on year.

Speaker #2: More than 50% of this income came from non-aero businesses, and about a third also came from the aero revenue. EBITDA for the quarter grew 22% year on year, to INR 15.7 billion.

Speaker #2: PAC for the quarter came at INR 1.5 billion, versus a loss of INR 1.4 billion in Q1 of fiscal 26. Reported quarterly PAC has remained positive for the 4th consecutive quarter.

Speaker #2: Consolidated net debt excluding FCCBs of INR 28.9 billion, which are deep in the money, remained unchanged. Versus last quarter at INR 340 billion. Combined net debt of decreased by INR 5.9 billion, offset by the increase of INR 3.1 billion at Bhogapuram and INR 2.9 billion, at GAL standalone.

Saurabh Chawla: Consolidated net debt, excluding FCCBs of INR 28.9 billion, which are deep in the money, remained unchanged versus last quarter at INR 340 billion. Combined net debt of Delhi and Hyderabad therefore decreased by INR 5.9 billion, offset by the increase of INR 3.1 billion at Bhogapuram and INR 2.9 billion at GAL standalone. On the operational front, traffic at GAL-operated airports rose 1% year on year in Q1 fiscal 2027, reaching 30.5 million passengers. This excludes the traffic at Cebu. On a quarterly basis, India's international traffic share handled by GAL-operated airports was highest in past four years. However, as we have been alluding to in the recent past, we expect traffic to remain soft in the H1 of fiscal 2027 and recover only in the H2 of fiscal 2027.

Saurabh Chawla: Consolidated net debt, excluding FCCBs of INR 28.9 billion, which are deep in the money, remained unchanged versus last quarter at INR 340 billion. Combined net debt of Delhi and Hyderabad therefore decreased by INR 5.9 billion, offset by the increase of INR 3.1 billion at Bhogapuram and INR 2.9 billion at GAL standalone. On the operational front, traffic at GAL-operated airports rose 1%year-on-year in Q1 fiscal 2027, reaching 30.5 million passengers. This excludes the traffic at Cebu. On a quarterly basis, India's international traffic share handled by GAL-operated airports was highest in past four years. However, as we have been alluding to in the recent past, we expect traffic to remain soft in the H1 of fiscal 2027 and recover only in the H2 of fiscal 2027.

Speaker #2: On the operational front, traffic at GAL operated airports rose 1% year on year, in Q1 fiscal 27, reaching 30.5 million passengers. This excludes the traffic at Cebu.

Speaker #2: On a quarterly basis, India's international traffic share handled by GAL operated airports was highest in past 4 years. However, as we have been alluding to in the recent past, we expect traffic to remain soft in the first half of fiscal 27 and recover only in the second half of fiscal 27, and this I would also like to highlight that we have some seasonality on a quarterly basis.

Saurabh Chawla: I would also like to highlight that we have some seasonality on a quarterly basis. Hyderabad has been impacted by the ongoing West Asian geopolitical instability, exposure to migrant gulf routes, and rising airfares, while on domestic front, impact is due to the route rationalization by certain airlines. We see some green shoots emerging as Air India plans to restore more suspended domestic and international flights from September onwards, after cutting up to 15% capacity during June to August. Total income at Delhi Airport rose 17% year on year to INR 20.7 billion. Aero revenues rose 24% year on year, and non-aero revenues increased 13% year on year. EBITDA for Q1 was up 11% year on year to INR 7 billion. With this, the airport has reported profit of INR 0.7 billion for Q1 fiscal 2027, making it the fifth consecutive quarter of positive PAT.

Saurabh Chawla: I would also like to highlight that we have some seasonality on a quarterly basis. Hyderabad has been impacted by the ongoing West Asian geopolitical instability, exposure to migrant gulf routes, and rising airfares, while on domestic front, impact is due to the route rationalization by certain airlines. We see some green shoots emerging as Air India plans to restore more suspended domestic and international flights from September onwards, after cutting up to 15% capacity during June to August. Total income at Delhi Airport rose 17%year-on-year to INR 20.7 billion. Aero revenues rose 24%year-on-year, and non-aero revenues increased 13%year-on-year. EBITDA for Q1 was up 11%year-on-year to INR 7 billion. With this, the airport has reported profit of INR 0.7 billion for Q1 fiscal 2027, making it the fifth consecutive quarter of positive PAT.

Speaker #2: Hyderabad has been impacted by the ongoing West Asian geopolitical instability exposure to migrant Gulf routes and rising airfares while on domestic front impact is due to the route rationalization by certain airlines.

Speaker #2: We see some green shoots emerging as Air India plans to restore most suspended domestic and international flights from September onwards, after cutting up to 15% capacity during June to August.

Speaker #2: Total income at Delhi Airport rose 17% year on year, to INR 20.7 billion. Aero revenues rose 24% year on year, and non-aero revenues increased 13% year on year.

Speaker #2: EBITDA for Q1 was up 11% year on year, to INR 7 billion. With this, the airport has reported profit of INR 0.7 billion for Q1 fiscal 27, making it the 5th consecutive quarter of positive PAC.

Speaker #2: At Hyderabad, total income for Q1 was INR 6.3 billion, almost unchanged year on year. While aero revenues fell 7% year on year, non-aero revenues increased by 12% year on year, EBITDA for Q1 is almost unchanged year on year, at INR 3.9 billion.

Saurabh Chawla: At Hyderabad, total income for Q1 was INR 6.3 billion, almost unchanged year on year. While aero revenues fell 7% year on year, non-aero revenues increased by 12% year on year. EBITDA for Q1 is almost unchanged year on year at INR 3.9 billion. PAT for the quarter was INR 847 million, up 35% year on year. Mopa or Goa airport reported a total income of INR 1.3 billion in Q1, up 23% year on year. Aero revenue increased 31% year on year as tariffs reverted to normal post discontinuation of special incentive plan. Non-aero revenues increased by 8% year on year. Notable achievements during the quarter are combined aero yield per pax or YPP in Q1 fiscal 2027 was INR 445 for Delhi, Hyderabad and Mopa. Non-aero income per pax or IPP was INR 691.

Saurabh Chawla: At Hyderabad, total income for Q1 was INR 6.3 billion, almost unchangedyear-on-year. While aero revenues fell 7%year-on-year, non-aero revenues increased by 12%year-on-year. EBITDA for Q1 is almost unchangedyear-on-year at INR 3.9 billion. PAT for the quarter was INR 847 million, up 35%year-on-year. Mopa or Goa airport reported a total income of INR 1.3 billion in Q1, up 23%year-on-year. Aero revenue increased 31%year-on-year as tariffs reverted to normal post discontinuation of special incentive plan. Non-aero revenues increased by 8%year-on-year. Notable achievements during the quarter are combined aero yield per pax or YPP in Q1 fiscal 2027 was INR 445 for Delhi, Hyderabad and Mopa. Non-aero income per pax or IPP was INR 691.

Speaker #2: PAC for the Q1 was INR 847 million, up 35% year on year. MOPA, or Goa Airport, reported a total income of INR 1.3 billion in Q1, up 23% year on year.

Speaker #2: Aero revenue increased 31% year on year, as tariffs reverted to normal post-discontinuation of special incentive plan. Non-aero revenues increased by 8% year on year.

Speaker #2: Notable achievements during the Q are: combined aero yield per PAC, or or YPP, in Q1 fiscal 27 was INR 445 for Delhi, Hyderabad, and MOPA.

Speaker #2: And non-aero income per PAC, or YPP, was INR 691. This includes the revenues from non-aero businesses adjusted for revenue share paid to airports and non-aero revenues reported by Delhi, Hyderabad, and MOPA Goa Airports.

Saurabh Chawla: This includes the revenues from non-aero businesses adjusted for revenue share paid to airports and non-aero revenues reported by Delhi, Hyderabad, and Mopa, Goa airports. To clarify, MRO and Hyderabad hotel are not part of the above IPP number. Non-aero and aero performance improved sequentially despite muted traffic. Coming to our non-aero adjacency business, duty-free revenue at Delhi and Hyderabad was stable versus Q4, despite softness in international traffic. At both airports, duty-free achieved highest monthly spend per passenger in June 2026. At Hyderabad, the new larger duty-free store is ready, expanding the store size from 400 square meters to 1,300 square meters. That will enable us to introduce new categories and products. GMR Airports Limited will participate in bids for non-aero adjacency businesses that are rebid by airports as and when the respective concessions at the airports end. Construction on multiple airport land development projects is underway.

Speaker #2: To clarify, MRO and Hyderabad Air Hotel are not part of the above YPP number. Non-aero and aero performance improved sequentially, despite muted traffic. Coming to our non-aero adjacency business, duty-free revenue at Delhi and Hyderabad was stable, versus Q4 despite softness in international traffic.

Speaker #2: At both airports, duty-free achieved highest monthly spend per passenger in June 26. At Hyderabad, the new larger duty-free store is ready, expanding the store size from 400 square meters to 1,300 square meters.

Speaker #2: That will enable us to introduce new categories and products. GAL will participate in bids for non-aero adjacency businesses that are rebid by airports as and when the respective concessions at the airports end.

Speaker #2: Construction and multiple airport land development projects is underway. Details of which are available in the results presentation. Fiscal 27 will see the handover of dials first self-development commercial building at Delhi Aero City where the pre-leasing discussions are already underway.

Saurabh Chawla: Details of which are available in the results presentation. Fiscal 2027 will see the handover of Delhi International Airport Limited's first self-development commercial building at Delhi Aerocity, where the pre-leasing discussions are already underway. At Mopa or Goa, sub-license agreements were signed for a retail interchange, a MICE hotel, as well as a K to 12 day school, while at Bhogapuram, the hotel under the Vivanta brand is in final stages of construction. CARE upgraded the credit rating of GMR Airports Limited to CARE A+ positive, stable from INR 15 billion NCDs as well as long-term bank facilities. For CARE A1+ from CARE A1 for short-term business facilities. MRO business signed an agreement with Honeywell Aerospace for maintenance, repair and overhaul of seven Honeywell Aerospace line replacement units installed on LEAP engines powering Airbus A320neo and Boeing 737 MAX.

Speaker #2: At MOPA, or Goa, sublicense agreements were signed for a retail interchange a MICE Hotel as well as a K-12 day school, while at Bhogapuram the hotel under the Vivanta brand is in final stages of construction.

Speaker #2: Care upgraded the credit rating of GAL to Care A+, positive stable from INR 15 billion NCBs as well as long-term bank facilities. And for Care, a 1+ from Care A1 for short-term business facilities.

Speaker #2: MRO business signed an agreement with Honeywell Aerospace for maintenance, repair, and overhaul of 7 Honeywell Aerospace line replacement units, installed on Leap engines powering Airbus 320neos and Boeing 737max.

Speaker #2: In line with our responsibility as a leading airport infrastructure company, sustainability remains deeply embedded in the way we design, build, and operate our assets.

Saurabh Chawla: In line with our responsibility as a leading airport infrastructure company, sustainability remains deeply embedded in the way we design, build, and operate our assets. Across our portfolio, we continue to focus on decarbonization, renewable energy adoption, water stewardship, waste management, operational efficiency, and community development. The ESG achievements highlighted in our investor presentation reflect our commitment to responsible growth while maintaining the highest standards of governance, safety, and operational excellence. As we expand our footprint, sustainability will continue to remain a core pillar of our strategy and a key enabler of long-term value creation. In closing, GMR Airports today is very different from what it used to be a few years ago. We have evolved from being primarily an airport operator into an integrated airport infrastructure platform with growing exposure to commercial development, retail, duty-free cargo, MRO and hospitality, and the airport linked urban ecosystems.

Speaker #2: Across our portfolio, we continue to focus on decarbonization, renewable energy adoption, water stewardship, waste management, operational efficiency, and community development. The ESG achievements highlighted in our investor presentation reflect our commitment to responsible growth while maintaining the highest standards of governance, safety, and operational excellence.

Speaker #2: As we expand our footprint, sustainability will continue to remain a core pillar of our strategy and a key enabler of long-term value creation. In closing, GMR Airports today is a very different from what it used to be a few years ago.

Speaker #2: We have evolved from being primarily an airport operator into an integrated airport infrastructure platform with growing exposure to commercial development, retail, duty-free, cargo, MRO, and hospitality.

Speaker #2: And the airport link urban ecosystems. As these businesses continue to scale, we expect an increasingly diversified and resilient earnings profile that will complement our core airport operations and strengthen long-term value creation for all stakeholders.

Saurabh Chawla: As these businesses continue to scale, we expect an increasingly diversified and resilient earnings profile that will complement our core airport operations and strengthen long-term value creation for all stakeholders. The presentation with all financial numbers is already available with you. If not, you can download it from our IR section of our website. We are available to respond to your questions on this call and offline after the call. Now I would like to open the forum for queries that will be addressed by my colleagues from corporate and business teams. Thank you so much.

Speaker #2: The presentation with all financial numbers is already available with you. If not, you can download it from our IR section of our website. We are available to respond to your questions on this call and offline after the call.

Speaker #2: Now, I would like to open the forum for queries. That can that will be addressed by my colleagues from corporate and business teams. Thank you so much.

Speaker #1: Thank you. Ladies and gentlemen, we will now begin the question and answer session. Anyone who wishes to ask a question may press star and 1 on their touchstone telephone.

Operator: Thank you. Ladies and gentlemen, we will now begin the question and answer session. Anyone who wishes to ask a question may press star and one on their touchtone telephone. If you wish to remove yourself from the question queue, you may press star and two. Participants are requested to use their handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. Participants, if you wish to ask a question, please press star and one. We take the first question from the line of Prateek Kumar from Jefferies. Please go ahead.

Speaker #1: If you wish to remove yourself from the question queue, you may press star and 2. Participants are requested to use their handsets while asking a question.

Speaker #1: Ladies and gentlemen, we will wait for a moment while the question queue assembles. Participants, if you wish to ask a question, please press star and 1.

Speaker #1: We take the first question from the line of Pradeep Kumar from Jefferies. Please go ahead.

Speaker #3: Yeah, hi, good morning. Morning, sir. I have a few questions. Firstly, on the Hyderabad airport traffic being extremely weak in recent quarters, could you highlight any initiatives specifically which you might be taking to revive traffic related to some loss of traffic to completing airports, and what should be our growth expectation for this airport qualified 27-28 in current environment?

Prateek Kumar: Yeah. Hi. Good morning, sir. I have three questions. Firstly, on Hyderabad Airport traffic being extremely weak in recent quarters, could you highlight any initiatives specifically which you might be taking to revive traffic related to some loss of traffic to competing airports? What should be our growth expectation for this airport for FY2027, 2028 in current environment?

Speaker #4: So, as far as the Hyderabad airport is concerned, I think the new roads are also being now opened for the international. As far as the domestic is concerned, efforts are being made to provide some incentives to the airlines.

GRK Garu: Well, as far as Hyderabad Airport is concerned, I think the new routes are also being now opened for the international. As far as the domestic is concerned, efforts are being made to provide some incentives to the airlines. As it is, we have not lost the traffic to any competing airports. It is an all India phenomenon, except Delhi, which has got growth. The traffic, what we are expecting in 2026, 2027 is more or less of the last year traffic, about 30.5 to 31 million.

G.R.K. Babu: Well, as far as Hyderabad Airport is concerned, I think the new routes are also being now opened for the international. As far as the domestic is concerned, efforts are being made to provide some incentives to the airlines. As it is, we have not lost the traffic to any competing airports. It is an all India phenomenon, except Delhi, which has got growth. The traffic, what we are expecting in 2026, 2027 is more or less of the last year traffic, about 30.5 to 31 million.

Speaker #4: As it is, we have not lost the traffic to any competing airports. It is All India phenomena, except Delhi, which has got a growth.

Speaker #4: So, the traffic, what we are expecting in 26-27 is more or less of the last year traffic, about 30.5 to 31 million.

Speaker #3: Pradeep, again,

Saurabh Chawla: Prateek, again, I want to highlight over here is that whilst yes, as a component, Hyderabad and Delhi form a bulk of our traffic, but as we have now made this into a platform, there are multiple streams of revenue that flow into our consolidated results. In our May call we had already highlighted that there will be a soft H1 based on the airlines' inputs as they rationalize their routes. As we speak right now, we are giving you a much more robust outlook for the H2 of this year, given again the inputs that we have from the airlines as they come back with an expanded capacity.

Speaker #2: I want to highlight over here is that whilst yes, there's a component Hyderabad and Delhi form a bulk of our traffic, but as we have now, you know, made this into a platform, there are multiple streams of revenue that flow into our consolidated results.

Speaker #2: So, in the in our May call, we had already highlighted that there will be a soft first half based on the airline's inputs as they rationalize their routes and now as we speak right now, they're giving you a much more robust outlook for the second half of this of this year, given again the inputs that we have from the airlines as they come back with an expanded capacity.

Speaker #3: Sure. My other question is on the new IRA tariff framework, which has been talked about. Would you date on IRA's thinking around proposed shift and the way the airport should be allowed to recover aero charge only after completion of underlying capex?

Prateek Kumar: Sure. My other question is on the new AERA tariff framework which has been talked about. Would you base on AERA's thinking around proposed shift and whether airport should be allowed to recover aero charges only after completion of underlying CapEx? What does this mean for your tariff expectation which you talked about of increasing versus prior periods for the next control period?

Speaker #3: Would this mean for your tariff expectations which you talked about of increasing versus prior period for the next 10-12 period?

GRK Garu: Are you referring to the incremental IRR concept of AERA or which one you are referring?

G.R.K. Babu: Are you referring to the incremental IRR concept of AERA or which one you are referring?

Speaker #4: Are you referring to the incremental IRR concept of IRA, or which one you are referring?

Speaker #3: Yeah, incremental IRA. So, last quarter, we guided for, like, our aero YPP at Hyderabad will be higher versus our prior control period. So, what is our expectation now in new frameworks?

Prateek Kumar: Yeah, incremental IRR. Last quarter we guided for our aero tariff YPP at Hyderabad will be higher versus prior control period. What is our expectation now in new frameworks? I know it is still in discussion and consultation phase, but how should we think for modeling purposes?

Speaker #3: I know it seems still discussion and consultation phase. But how should we think for modeling purposes?

Speaker #4: Modeling purposes, the conceptually, it is actually the one and the same. There is not much difference between earlier concept and new concept. What the regulator has mentioning is that the increased tariff will be provided once the asset is put to use, complete construction is completed.

GRK Garu: Modeling purposes, conceptually, it is actually one and the same. There is not much difference between earlier concept and new concept. What the regulator has mentioned is that the increased tariff will be provided once the asset is put to use, construction is completed. However, the good thing is in the consultation paper of Hyderabad we can also see he has already acknowledged that INR 13,800 crore is being spent by Hyderabad Airport and accordingly the tariffs also will go up soon after the construction is completed. That is what is the recommendation. However, we have already made a request to the regulator that the moment we provide the increase in tariff after put to use, then there will be a sudden spike in the tariffs.

G.R.K. Babu: Modeling purposes, conceptually, it is actually one and the same. There is not much difference between earlier concept and new concept. What the regulator has mentioned is that the increased tariff will be provided once the asset is put to use, construction is completed. However, the good thing is in the consultation paper of Hyderabad we can also see he has already acknowledged that INR 13,800 crore is being spent by Hyderabad Airport and accordingly the tariffs also will go up soon after the construction is completed. That is what is the recommendation. However, we have already made a request to the regulator that the moment we provide the increase in tariff after put to use, then there will be a sudden spike in the tariffs.

Speaker #4: However, the good thing is, in the consultation paper of Hyderabad, we can also see there's already acknowledged that 13,800 crore rupees is being spent by Hyderabad airport.

Speaker #4: And accordingly, the tariffs also will go up soon after the construction is completed. That is what his recommendation. However, we have already made a request to the regulator that the moment you provide the increase in tariff after put to use, then there will be a sudden spike in the tariffs.

Speaker #4: So, to equalize it over a period of time, we are still suggested the regulator that the current methodology should be continued and the airlines are also expressed this more or less the same view, though they did not say specifically, because they also do not want any spike suddenly.

GRK Garu: To equalize it over a period of time, we have still suggested the regulator that the current methodology should be continued and the airlines have also expressed more or less the same view, though they did not say specifically because they also do not want any spikes suddenly. In case of Hyderabad, for example, 29 September when the construction completes the current tariff which he has proposed, 485 will become almost 900, but that is not advisable for the airlines or other airports. So we have suggested the regulator. Our regulator has actually requested us to come back with a revised formula. So more or less, we will be sticking on to the existing methodology only. We have to still wait and see how the regulator is going to respond.

G.R.K. Babu: To equalize it over a period of time, we have still suggested the regulator that the current methodology should be continued and the airlines have also expressed more or less the same view, though they did not say specifically because they also do not want any spikes suddenly. In case of Hyderabad, for example, 29 September when the construction completes the current tariff which he has proposed, 485 will become almost 900, but that is not advisable for the airlines or other airports. So we have suggested the regulator. Our regulator has actually requested us to come back with a revised formula. So more or less, we will be sticking on to the existing methodology only. We have to still wait and see how the regulator is going to respond.

Speaker #4: In case of Hyderabad, for example, September 29, when the construction completes, the current tariff, which he has proposed 485, will become almost 900. But that is not advisable for the airlines as well as the airports.

Speaker #4: So, we have suggested the regulator, our regulator has actually requested us to come back with a revised formula. So, more or less, we will be sticking on to the existing methodology only.

Speaker #4: We have to still wait and see how the regulator is going to respond.

Speaker #3: Okay. And question, other airports, like Bogapuram Airport, based on the current ad hoc tariffs, which came recently, what is the implied YPP and how does this compare versus your expectation of airport once operations scale up?

Prateek Kumar: Okay. A question on other airports, so like Bhogapuram Airport, based on the current ad hoc tariff which came recently, what is the implied YPP and how does this compare versus your expectation of airport once operations scale up?

Speaker #4: The Hyderabad, the Bogapuram Airport, the ad hoc tariff is basically regulator provides around 60 to 75 percent of the actual tariff only. So, he has given us the average yield of around 200 rupees.

GRK Garu: The Bhogapuram Airport, the ad hoc tariff is basically regulator provides around 60% to 75% of the actual tariff only. So he has given us the average yield of around INR 200 as ad hoc and our expectation should be in the range of between INR 1,800 to INR 2,000 yield per pax.

G.R.K. Babu: The Bhogapuram Airport, the ad hoc tariff is basically regulator provides around 60% to 75% of the actual tariff only. So he has given us the average yield of around INR 200 as ad hoc and our expectation should be in the range of between INR 1,800 to INR 2,000 yield per pax.

Speaker #4: As ad hoc, and our expectation should be in the range of between 1,800 to 2,000 rupees yield per pax.

Speaker #3: So, regulator has given 200 versus expectation about 1,800.

Prateek Kumar: Regulator has given INR 200 versus expectation was INR 1,800.

Speaker #4: No, no, 1,200 is the 1,200 is the ad hoc tariff. And normally, regulator provides around between 60 to 75 percent of the actual tariff only they give as ad hoc.

GRK Garu: No, no. INR 200 is the ad hoc tariff and normally regulator provides between 60% to 75% of the actual tariff only they give as ad hoc. They do not give nearer to the tariff. Our tariff expectation is between INR 1,700 to INR 1,900 yield per pax, final tariff.

G.R.K. Babu: No, no. INR 200 is the ad hoc tariff and normally regulator provides between 60% to 75% of the actual tariff only they give as ad hoc. They do not give nearer to the tariff. Our tariff expectation is between INR 1,700 to INR 1,900 yield per pax, final tariff.

Speaker #4: They don't give nearer to the tariff. So, our tariff expectation between 1,700 to 1,900 yield per pax. Final tariff.

Speaker #3: Okay. Lastly, on Nagpur Airport, could you share FI26 revenue EBITDA for the for the for the airport?

Prateek Kumar: Okay. Lastly, on Nagpur Airport, could you share FY26 revenue, EBITDA for the airport?

Speaker #4: FI26, no, because the last year, they have closed it was operated by MIL. They have closed with around 140 crore rupees of the revenue, and EBITDA about 40 to 45 crores, if I'm correct, because they don't have any interest, they don't have anything else.

GRK Garu: FY26, no, because the last year they have closed. It was operated by MIAL. They have closed with around INR 140 crore of the revenue and EBITDA about INR 40 to INR 45 crore, if I am correct, because they do not have any interest and they do not have anything else. I think they have posted a PAT around INR 30, INR 35 crore.

G.R.K. Babu: FY26, no, because the last year they have closed. It was operated by MIAL. They have closed with around INR 140 crore of the revenue and EBITDA about INR 40 to INR 45 crore, if I am correct, because they do not have any interest and they do not have anything else. I think they have posted a PAT around INR 30, INR 35 crore.

Speaker #4: I think they have posted a pat around 30, 35 crores.

Speaker #3: And we will start paying 15 percent revenue share or sorry, 18 percent revenue share on this 140 crore numbers scaling up, and that will reply result in lower EBITDA?

Prateek Kumar: We will start seeing 18% revenue share on this INR 140 crore number scaling up and that will result in lower EBITDA. How should we think of EBITDA in FY27?

Speaker #3: How should we think of EBITDA in FI27?

Speaker #4: No, the we continue to pay 14.49 percent of the revenue share. That is as per the concession agreement. And we have already started because in June, we have already started July.

GRK Garu: No, we continue to pay 14.49% of the revenue share. That is as per the concession agreement and we have already started because in June we have already started July. Their EBITDA and our EBITDA is not comparable because the way they operate a non-aero revenue under the areas are very, very premature. We are going to totally ramp up the entire terminal as well as non-aero areas. So we are expecting that our EBITDA and profit should be much better.

G.R.K. Babu: No, we continue to pay 14.49% of the revenue share. That is as per the concession agreement and we have already started because in June we have already started July. Their EBITDA and our EBITDA is not comparable because the way they operate a non-aero revenue under the areas are very, very premature. We are going to totally ramp up the entire terminal as well as non-aero areas. So we are expecting that our EBITDA and profit should be much better.

Speaker #4: And EBITDA their EBITDA and our EBITDA is not comparable because the way they operated non-error revenue under the areas are very, very premature. Whereas we are going to total ramp up the entire terminal as well as non-error areas.

Speaker #4: So, we are expecting that our EBITDA and profit should be much better.

Speaker #3: Sure, sir. I have more question. I'll get back to the queue.

Prateek Kumar: Sure, sir. I have more question. I will get back to you later.

Speaker #2: Thank you. We take the next question from the line of Nathan G from Bank of America. Please go ahead.

Operator: Thank you. We take the next question from the line of Nathan G. from Bank of America. Please go ahead.

Speaker #5: Hi, hi, sir. Thank you for the call. Maybe two questions from me. Firstly, just in terms of Delhi, are you able to talk about 1Q costs?

Nathan G.: Hi, sir. Thank you for the call. Maybe two questions from me. Firstly, just in terms of Delhi, are you able to talk about Q1 costs? I think they are up about 19% year-on-year, so the drivers of that, and then is that a good run rate for the next few quarters? That is the first question. Second question is just in terms of short-term traffic. Anything you can say around the July traffic trends and is June a good indicator?

Speaker #5: I think they're up about 19 percent year on year. So, the drivers of that, and is that a good run rate for the next few quarters?

Speaker #5: So, that's the first question. Second question is just in terms of short-term traffic. Anything you can say around the July traffic trends? And so, is June a good July was trending?

Speaker #5: Thank you.

Speaker #4: Can we about to 17, 18 crore rupees? The second one is airport operator fee is payable on the previous year turnover. So, the previous year turnover is more than 7800 crore rupees, although it turned on year-long basis.

GRK Garu: In case of the Delhi, the gone up on two front. One is being somewhere about INR 1,700 crore, INR 1,800 crore. The second one is airport operator fee is payable on the previous year turnover. The previous year turnover is more than INR 700 crore, INR 800 crore, 700, 800 on a yearly basis. That is why there is an extra provision towards the airport operator fee in the first quarter. These are the two major and a small repair and maintenance, about INR 10 crore extra has come up during this quarter. It will be moderated over a period of the next three quarters.

G.R.K. Babu: In case of the Delhi, the gone up on two front. One is being somewhere about INR 1,700 crore, INR 1,800 crore. The second one is airport operator fee is payable on the previous year turnover. The previous year turnover is more than INR 700 crore, INR 800 crore, 700, 800 on a yearly basis. That is why there is an extra provision towards the airport operator fee in the first quarter. These are the two major and a small repair and maintenance, about INR 10 crore extra has come up during this quarter. It will be moderated over a period of the next three quarters.

Speaker #4: That's why there is an extra provision towards the airport operator fee in the first quarter. These are the two major. And a small repair and maintenance, about 10 crore rupees extra, has come up during this quarter.

Speaker #4: And it will be moderated over a period of the next three quarters.

Speaker #5: Okay, that's clear. Thank you.

Speaker #2: Thank you. We take the next question from the line of Karthik Chellappa from Indus Capital. Please go ahead.

Nathan G.: Okay, that is clear. Thank you.

Speaker #5: Yeah, hi. Thank you very much for the opportunity, sir. Am I audible?

Operator: Thank you. We take the next question from the line of Karthik Chellappa from Indus Capital. Please go ahead.

Speaker #4: Yeah, yeah.

Speaker #5: Okay, great. Sir, two questions from my side. The first is, as far as our standalone debt is concerned, I know you had highlighted in the past that this is likely to go up and it's more opportunistic because you're preparing to bid for various projects.

Karthik Chellappa: Hi. Thank you very much for the opportunity, sir. Am I audible?

GRK Garu: Yeah.

G.R.K. Babu: Yeah.

Karthik Chellappa: Okay, great. Sir, two questions from my side. The first is, as far as our standalone debt is concerned, I know you had highlighted in the past that this is likely to go up and it is more opportunistic because you are preparing to bid for various projects. At what point do you think the standalone debt is likely to peak?

Speaker #5: At what point do you think the standalone debt is likely to peak?

Speaker #4: The currently, the standalone debt is standing around 7,400 crore rupees. The as of today, we have a legroom another 200 crores only to rise as per the bondholders' covenants is concerned.

GRK Garu: Currently, the standalone debt is standing around INR 7,400 crore. As of today, we have a room another INR 200 crore only to rise as per the bondholders' covenant is concerned. For the time being, we are not planning to raise any additional debt for it because we don't have any further requirement of investment. Nagpur, we have already done some investment and as far as other projects are concerned, we have already made investments. So right now we are not planning for any additional debt.

G.R.K. Babu: Currently, the standalone debt is standing around INR 7,400 crore. As of today, we have a room another INR 200 crore only to rise as per the bondholders' covenant is concerned. For the time being, we are not planning to raise any additional debt for it because we don't have any further requirement of investment. Nagpur, we have already done some investment and as far as other projects are concerned, we have already made investments. So right now we are not planning for any additional debt.

Speaker #4: For the time being, we are not planning to rise any additional debt for it because we don't have any further requirement of investment. Nagpur, we have already done some investment and as far as other projects are all concerned, we have already made investment.

Speaker #4: So, right now, we are not planning for any additional debt.

Speaker #5: So, there's no opportunity right now. We don't have an opportunity right now. So, that's why I think the debt is peaking at about 7,400 crores, and shall remain at this.

Prateek Kumar: There is no opportunity right now. We don't have an opportunity right now. That is why I think the debt is peaking at about INR 7,400 crore and shall remain at this. If there is any opportunity which requires us to raise capital, then of course, we will raise it. Along with that, there will be, of course

Saurabh Chawla: There is no opportunity right now. We don't have an opportunity right now. That is why I think the debt is peaking at about INR 7,400 crore and shall remain at this. If there is any opportunity which requires us to raise capital, then of course, we will raise it. Along with that, there will be, of course

Speaker #5: If there is any opportunity, which requires us to raise capital, then, of course, we will raise it. And along with that, there will be, of course, you know, EBITDA contributions that will come against that any debt raise that we do.

Speaker #5: So, at this stage, I think from your modeling perspective, assume that it is about 7,400 crores. And sir, what will be the average cost of this debt, sir?

Saurabh Chawla: EBITDA contributions that will come against any debt raise that we do. At this stage, I think from your modeling perspective, assume that it is about INR 7,400 crores.

Speaker #4: No, average cost of debt as of today is around 11, 11.5 percent maximum. And another 1,500 crore rupees is coming up for I mean, it is completing the May call period.

Karthik Chellappa: What will be the average cost of this debt, sir?

Saurabh Chawla: No, average cost of debt as of today is around 11.5% maximum, and another INR 1,500 crore rupees is coming up for. It is completing the make-whole period. We are now targeting below 10% for.

Speaker #4: We are now targeting below 10 percent for cost for refinancing of the 1,500 crores. So, they are our intention is the entire debt cost should come below 10 percent over the next 12 months period.

Karthik Chellappa: Cost

Speaker #5: And I just also want to clarify that the 7,400 is the gross debt number. The net debt number is about 6,400, 6,500 crores. So.

Saurabh Chawla: Cost for refinancing of the INR 1,500 crores. Our intention is the entire debt cost should come below 10% over the next 12 months period. I just also want to clarify that the INR 7,400 is the gross debt number. The net debt number is about INR 6,400, INR 6,500 crores.

Speaker #4: Cash sitting.

Speaker #5: Which because it has cash also sitting on its books. So, I think from our tracking perspective, look at the net debt number as such.

Speaker #5: Okay. This is useful. The reason I ask is, if I look at our first quarter interest liability on GAN standalone, which is, let's say, about 290 crore.

Karthik Chellappa: Cash sitting.

Saurabh Chawla: Because it has cash also sitting on its books. I think from a tracking perspective, look at the net debt number as such.

Speaker #5: If I just annualize it, let's say about 1,200 crore or so, and if I take that as a on the gross debt amount, the interest cost implicitly comes to a much higher number than 11 to 11 and a half.

Karthik Chellappa: Okay. This is useful. The reason I ask is, if I look at our Q1 interest liability on GMR Airports standalone, which is roughly about INR 290 crore. If I just annualize it, let's say about INR 1,200 crore or so, and if I take that on the gross debt amount, the interest cost implicitly comes to a much higher number than 11% to 11.5%. I am just trying to see how do I reconcile that.

Speaker #5: So, I'm just trying to see how do I reconcile that.

Speaker #4: I think this includes the finance cost, includes the FCCB interest also.

Speaker #5: You need to exclude the FCCB interest. Okay. So, the balance is basically the FCCB interest, which is in there. Okay. That is fine.

Saurabh Chawla: I think this includes the finance cost, includes the FCCB interest also. You need to exclude the FCCB interest.

Speaker #4: FCCB.

Speaker #5: My second. Okay.

Speaker #4: FCCB, you should take it as equity because it's deep into money. The strike price is 43 rupees, 40 pesa. So, but because of the counting standards, we need to recognize the interest on an accrual basis over there.

Karthik Chellappa: Okay. The balance of FCCB interest, which is in there. Okay, that is fine. My second, okay.

Saurabh Chawla: FCCB, you should take it as equity because it is deep into money. The strike price is INR 43.40.

Speaker #5: Okay. Excellent. My second question, sir, is, if you look at Hyderabad, the traffic pressure, you already you already explained in your opening remarks. And if you look at the non-arrow revenue growth, that has been very, very healthy.

Karthik Chellappa: Okay.

Saurabh Chawla: Because of the accounting standards, we need to recognize the interest on an accrual basis over there.

Karthik Chellappa: Okay, excellent. My second question, sir, is if you look at Hyderabad, the traffic pressure, you already explained in your opening remarks. If you look at the non-aero revenue growth, that has been very healthy. In fact, on a per pack basis, it is also up double digits, which is very commendable given the current circumstances. Despite that, the absolute EBITDA didn't grow for Hyderabad. Apart from the non-aero revenue decline on the traffic pressure, are there any other nuances which also resulted in the EBITDA not growing, or is it just purely traffic and aero revenue decline driven?

Speaker #5: In fact, on a per-pack basis, it is also up double digits, which is very, very commendable given the current circumstances. But despite that, the absolute EBITDA didn't grow for Hyderabad.

Speaker #5: Apart from the non-arrow revenue decline, and the traffic pressure, are there any other nuances which also resulted in the EBITDA not growing, or is it just purely traffic and arrow revenue decline driven?

Speaker #4: It is more or less purely on error income. And as far as non-arrow income is actually compensated, the loss of revenue under error income, if you look at it, the comparison of even Q4 to Q1 are Q1 or over Q1.

Saurabh Chawla: It is more or less purely on aero income. As far as non-aero income is actually compensated the loss of revenue under aero income, if you look at it, the comparison of even Q4 to Q1 or Q1 over Q1.

Speaker #5: Okay. And besides that, the traffic improvement, we expect in second half 27, but for the full year, Hyderabad's value traffic volume growth will more or less be flat year on year.

Speaker #5: If I heard that correctly.

Karthik Chellappa: Okay. We said that the traffic improvement we expect in H2 2027, but for the full year, Hyderabad traffic volume growth will more or less be flat year-on-year, if I heard that correctly.

Speaker #4: Yes, yes, you heard that correctly. It will remain flat as it was last year. And that is the only, honestly speaking, the soft part of our portfolio if you were to compare with fiscal 25.

Saurabh Chawla: Yes. You heard that correctly. It will remain flat as it was last year. That is the only, honestly speaking, the soft part of our portfolio if you were to compare with fiscal 2025. Delhi is showing good growth. Hopefully, I think the H2 will catch up for Hyderabad, but on an overall annual basis, it will be flat.

Speaker #4: Delhi has is showing good growth. And the hopefully, I think, the second half will catch up for Hyderabad. But on a overall annual basis, it will be flat.

Speaker #5: Excellent. I do have a few follow-up, but I'll come back in a few. Thank you very much, sir, and wish you and the team all the very best for the remaining quarters.

Speaker #4: Thank you.

Speaker #2: Thank you. We take the next question from the line of Aditya Monge from Kotak Institutional Equities. Please go ahead.

Karthik Chellappa: Excellent. I do have a few follow-up, but I will come back in the queue. Thank you very much, sir, and wish you and the team all the very best for the remaining quarters.

Speaker #3: Yeah, thank you for the opportunity and great sets of results once again on non-arrow. That being said, a few questions from my side. The first question that I had was, just on let's say, loans that have been given from GAL to outside entities, I think it's a relevant number at about 2,000 odd crores, if I'm not wrong.

Saurabh Chawla: Thank you.

Operator: Thank you. We take the next question from the line of Aditya Monga from Kotak Institutional Equities. Please go ahead.

Aditya Monga: Yes, thank you for the opportunity and great sets of results once again on non-aero. That being said, a few questions from my side. The first question that I had was just on, let's say, loans that have been given from GAL to outside entities. I think it's a relevant number at about 2,000 odd crores, if I am not wrong. Since we have only as much of leeway remaining to invest from a gross debt perspective, is there any thought process of getting this money back in and what are the timelines for the same?

Aditya Mongia: Yes, thank you for the opportunity and great sets of results once again on non-aero. That being said, a few questions from my side. The first question that I had was just on, let's say, loans that have been given from GAL to outside entities. I think it's a relevant number at about 2,000 odd crores, if I am not wrong. Since we have only as much of leeway remaining to invest from a gross debt perspective, is there any thought process of getting this money back in and what are the timelines for the same?

Speaker #3: Since we have only as much of leeway remaining to invest from a gross debt perspective, is there any thought process of getting this money back, and then what are the timelines for the same?

Speaker #5: So, Aditya, let me just give you a background. GAL never gave specific loans to its associate entity, which is GPYL. This is part of the demerger process that happened a few years back.

Saurabh Chawla: Well, let me just give you a background. GAL never gave specific loans to its associate entity, which is GPIL. This is part of the demerger process that happened few years back. So in the demerger process, as per the tax laws, you have to identify the end use of the debt that is raised of the merged entity. As per that end use, you have to then allocate it to the two demerged entities. So this is the history behind this current debt which is there in GAL's books. Second thing is, GAL has already received last year, it received about 800, 850 odd crores from GPIL. This year also it is expected to receive another 1,000 odd crores.

Speaker #5: So, in the demerger process, as per the tax laws, you have to identify the end use of the debt that is raised of the merch entity.

Speaker #5: And as per that end use, you have to then allocate it to the two demerged entities. So, this is the history behind this current debt, which is there, in GAL's books.

Speaker #5: Second thing is, GAL has already received last year, it received about 800, 850 odd crores from GPYL. And this year also, this year also, it is expected to receive another 1,000 odd crores.

Speaker #5: So, there's a there is a there's a plan that is in place, which was agreed at the time of the demerger, that over a period of four to five years, GPYL will continue to pay off its debt to GAL.

Saurabh Chawla: So there is a plan that is in place which was agreed at the time of the demerger that over a period of 4 to 5 years GPIL will continue to pay off its debt to GAL. It is continuing as per the plan, and we expect that over the next 3 odd years, the total money of about INR 2,500 crores plus the interest will be received from GPIL to GAL. That is the broad construct.

Speaker #5: So, it is it is continuing as per the plan. And we expect that over the next three odd years, the total money of about two and a half thousand crores, plus the interest, will be received from GPYL to GAL.

Speaker #5: That's the broad construct.

Speaker #3: Understood. And just a little question as a from a dividend perspective, this is obviously an inflow coming in. But then there'd also be certain covenants wherein the debt numbers have to, first of all, be pared down.

Aditya Monga: Understood. Just a related question, from a dividend perspective, this is obviously an inflow coming in. But then there will also be certain covenants wherein the debt numbers have to first of all be paid down. I am not sure. Just trying to get a sense of, is there a certain debt number to which you have to fall from 7,100 before you start thinking of paying some dividends?

Aditya Mongia: Understood. Just a related question, from a dividend perspective, this is obviously an inflow coming in. But then there will also be certain covenants wherein the debt numbers have to first of all be paid down. I am not sure. Just trying to get a sense of, is there a certain debt number to which you have to fall from 7,100 before you start thinking of paying some dividends?

Speaker #3: I'm not sure. So, just trying to get a sense of, is there a certain debt number to which you have to fall from 7,400 before you start thinking of paying dividends?

Speaker #4: So, honestly, I think the first step is is to have from a GAL perspective, the requisite free cash coming from at least three streams of business.

Saurabh Chawla: Well, honestly, I think the first step is to have, from a GAL perspective, the requisite free cash coming from at least 3 streams of business. One is Hyderabad, which is already giving dividends. Two is robust growth of our non-aero business, which is already happening, and you can see it. The third is also dividends to start flowing from Delhi Airport. We expect dividends to start coming from Delhi Airport in next 2 years as Delhi Airport's own standalone balance sheet becomes positive. It has already started to generate free cash, and hence, in 2 years' time, it should be ready to start giving dividends to GAL, its 74% shareholder. So that is the plan right now. Covenants are not there. The covenants are basically our own. Our own covenants are that we need to keep our net debt to EBITDA at a reasonable level.

Speaker #4: One is Hyderabad, which is already giving dividends. Two is robust growth of our non-arrow business, which is already happening, and you can see it.

Speaker #4: And the third is also dividends to start flowing from from Delhi airport. And we expect dividends to start coming from Delhi airport in next two years as Delhi airport's own standalone balance sheet becomes positive.

Speaker #4: It's already started to generate free cash. And hence, in two years' time, it should be ready to start giving dividends to to GAL, its 74% shareholder.

Speaker #4: So, that is the plan right now. Covenants are not there. The covenants are basically our own our own covenants are that we need to keep a net debt to EBITDA at a reasonable level.

Speaker #4: We are very comfortable for a growth company like ours, which is which which is very capital intensive in nature, to have a net debt to EBITDA multiple of about four to four and a half, and we will we will achieve that much ahead of the time period when dividends are expected to be declared.

Saurabh Chawla: We are very comfortable for a growth company like ours, which is very capital-intensive in nature, to have a net debt to EBITDA multiple of about 4 to 4.5.

Speaker #4: That's how we are moving forward.

Aditya Monga: Yeah.

Aditya Mongia: Yeah.

Saurabh Chawla: And we will achieve that much ahead of the time period when dividends are expected to be declared. That's how we are moving forward.

Speaker #3: Understood. I should just see clarifications from my side and get back into the queue. When GAL is increasing the debt numbers, see, I can see GAL is at standalone level now making a pat that is positive even if I don't assume dividends.

Aditya Monga: Understood. There's just a few clarifications from my side and then back into the queue. When GMR Airports is increasing the debt numbers, I can see GMR Airports is at standalone level now making a PAT that is positive even if I don't assume dividends, which is commendable, I think so. But still GMR Airports is borrowing more and more. So where is this money end up going in right now?

Aditya Mongia: Understood. There's just a few clarifications from my side and then back into the queue. When GMR Airports is increasing the debt numbers, I can see GMR Airports is at standalone level now making a PAT that is positive even if I don't assume dividends, which is commendable, I think so. But still GMR Airports is borrowing more and more. So where is this money end up going in right now?

Speaker #3: Which is commendable. But still, GAL is borrowing more and more. So, is this where is this money kind of going in right now?

Speaker #4: There is no borrowing now, Aditya. Where is where is the borrowing more and more? Which year are you looking at?

Speaker #3: 300. So, GAL standalone has added 300 crores, right? To net debt Q1, Q2. So, that's where the question is happening.

Saurabh Chawla: There is no borrowing now, Aditya. Where is the borrowing more and more? Which year are you looking at?

Speaker #4: So, so you're not added any debt. We are not added any debt in Q1. What number are you looking at? One second.

Aditya Monga: GMR Airports standalone has added INR 300 crores, right? To net debt Q1Q. So that's where the question is happening.

Aditya Mongia: GMR Airports standalone has added INR 300 crores, right? To net debt Q1Q. So that's where the question is happening.

Speaker #5: Aditya said, come in. It is basically because we are reporting the net debt. There's a reduction of cash, and hence you are looking at the net debt number slightly moving up.

Saurabh Chawla: So-

GRK Garu: We have not added any debt.

G.R.K. Babu: We have not added any debt.

Saurabh Chawla: We have not added any debt in Q1. What number are you looking at? One second.

Speaker #5: It's a reduction of debt, cash. Which was available in our books, as of year end.

GRK Garu: Aditya, if I may come in.

G.R.K. Babu: Aditya, if I may come in.

Aditya Monga: Yeah.

Aditya Mongia: Yeah.

GRK Garu: It is basically because we are reporting the net debt, there is a reduction of cash, and hence you are looking at the net debt number slightly moving up. It is a reduction of debt.

G.R.K. Babu: It is basically because we are reporting the net debt, there is a reduction of cash, and hence you are looking at the net debt number slightly moving up. It is a reduction of debt.

Speaker #3: I think the question is, where is the cash going? Is it going into your upcoming airports or is there another conduit where it is going?

Saurabh Chawla: Cash

GRK Garu: a cash which was available in our books as of year-end.

G.R.K. Babu: a cash which was available in our books as of year-end.

Speaker #4: So, one one, there are no upcoming airports.

Aditya Monga: I think the question is where is the cash going? Is it going into your upcoming airports, or is there another conduit where it is going?

Aditya Mongia: I think the question is where is the cash going? Is it going into your upcoming airports, or is there another conduit where it is going?

Speaker #5: No, no. The cash has come down because we have made it to investments. One is that too, since Nagpur airport has been taken over, as per the concession agreement, you had to make a minimum investment of 168 crore rupees.

Saurabh Chawla: There are no upcoming airports.

GRK Garu: No, the cash has come down because we have made two investments.

G.R.K. Babu: No, the cash has come down because we have made two investments.

Speaker #5: That investment has been done. The second one is, we have also made investment into GCLF, GMR cargo and logistic company, about 100 crore rupees.

Saurabh Chawla: Yeah.

GRK Garu: One is that since Nagpur Airport has been taken over, as per the concession agreement, you have to make a minimum investment of INR 168 crore. That investment has been done. The second one is we have also made investment in the GCAL, GMR Cargo and Logistics Limited, about INR 100 crore. So these are all investments have been made out of the cash available, but debt has not gone up.

G.R.K. Babu: One is that since Nagpur Airport has been taken over, as per the concession agreement, you have to make a minimum investment of INR 168 crore. That investment has been done. The second one is we have also made investment in the GCAL, GMR Cargo and Logistics Limited, about INR 100 crore. So these are all investments have been made out of the cash available, but debt has not gone up.

Speaker #5: So, these are all the investments have been made out of the cash available, but debt has not gone up.

Speaker #3: Understood. Last and final question. On the non-arrow so Goa has two parts, arrow and non-arrow. The arrow per tax is a very different number this quarter.

Speaker #3: So, if you can explain that. And secondly, we would have anticipated that the non-arrow per tax starts showing good growth trends, which are yet not visible.

Aditya Monga: Understood. Last and final question. On the non-aero, Goa has two parts, aero and non-aero. The aero PAT is a very different number this quarter. If you can explain that. Secondly, we would have anticipated that the non-aero PAT starts showing good growth trends, which are yet not visible. So those are the last two things that I'd take your views on.

Aditya Mongia: Understood. Last and final question. On the non-aero, Goa has two parts, aero and non-aero. The aero PAT is a very different number this quarter. If you can explain that. Secondly, we would have anticipated that the non-aero PAT starts showing good growth trends, which are yet not visible. So those are the last two things that I'd take your views on.

Speaker #3: So, those are the last two things that I thought I'll take your views on.

Speaker #5: Actually, another thing is, in continuing the GAL, we have also made investment of 250 crore rupees in cargo business as a deposit we are going to dial.

Speaker #5: That also depleted our cash in GAL. So, there are three investments we made. And coming to the Goa, since we have withdrawn all the incentives given to the airlines, that is the reason why even the traffic has come down, the arrow revenues have gone up.

GRK Garu: Another thing is, in continuing with GAL, we have also made investment of INR 250 crore in cargo business as a deposit we are going to tie. That also depleted our cash in GAL. So there are three investments we made. Coming to the Goa, since we have withdrawn all the incentives given to the airlines, that is the reason why even though traffic has come down, the aero revenues have gone up. That is the reason. So I think Saurabh Chawla has already explained during his opening remarks that we have withdrawn all the incentives which we have given to the airlines, which was about almost INR 170 crore last year. Because of that, despite the fact traffic has come down, the revenues have gone up.

G.R.K. Babu: Another thing is, in continuing with GAL, we have also made investment of INR 250 crore in cargo business as a deposit we are going to tie. That also depleted our cash in GAL. So there are three investments we made. Coming to the Goa, since we have withdrawn all the incentives given to the airlines, that is the reason why even though traffic has come down, the aero revenues have gone up. That is the reason. So I think Saurabh Chawla has already explained during his opening remarks that we have withdrawn all the incentives which we have given to the airlines, which was about almost INR 170 crore last year. Because of that, despite the fact traffic has come down, the revenues have gone up.

Speaker #5: That is the reason. So, I think Saurabh has already explained during his opening remarks that we have withdrawn all the incentives which we have given to the airlines, which was about almost 170 crore rupees last year.

Speaker #5: And because of that, despite the fact traffic has come down, the revenues have gone up.

Speaker #3: Any comments on non-arrow, Goa? How to think through its incrementally since the numbers are still kind of flattish over here? Not improving anything.

Speaker #5: So, non-arrow, if you would have seen both SPP and IPP have gone up. In fact, SPP has gone up by almost 24% pure play.

Aditya Monga: Any comments on non-aero, Goa? How to think through it incrementally since the numbers are still kind of flat-ish over year, not improving meaningfully.

Aditya Mongia: Any comments on non-aero, Goa? How to think through it incrementally since the numbers are still kind of flat-ish over year, not improving meaningfully.

Speaker #5: Non-arrow commercial SPP. And this was primarily driven driven by the new liquor retail store, which got opened last last year after June. But as we have been communicating consistently, we look at on a more sustained basis about seven to eight percent kind of SPP growth on a very sustained basis.

Rajesh Arora: Non-aero, if you would have seen both SPP and IPP have gone up. In fact, SPP has gone up by almost 24%, pure play non-aero commercial SPP. This was primarily driven by the new liquor retail store, which got opened last year after June. As we have been communicating consistently, we look at on a more sustained basis about 7% to 8% kind of SPP growth on a very sustained basis, and overall non-aero income going up by about 14% to 15%, depending upon the traffic growth over 7% to 8%. That is the, I would say, more long-term consistent number.

Speaker #5: And overall, non-arrow income going up by about 14 to 15 percent, depending upon the traffic growth over seven to eight percent. That's the, I would say, a more long-term consistent number, I would say.

Speaker #4: Aditya, basically, the if you look at it, the revenues of non-arrow have come down in the first quarter, mainly because the traffic has come down.

Speaker #4: The traffic in the 1.59 million to 1.2 million, it has come down. That impact is there on non-arrow income. Whereas arrow income has gone up because we have withdrawn all the incentives.

Saurabh Chawla: Aditya, basically, if you look at it, the revenues of non-aero have come down in the first quarter, mainly because the traffic has come down. The traffic in the 1.59 million to 1.2 million, it has come down. That impact is there on non-aero income, whereas aero income has gone up because we have tapered on all the incentives. As Rajesh said that there is spend per passenger, income per passenger actually has gone up in case of the Goa.

Speaker #4: And as Rajesh said, that there is spend for passenger, income for passenger actually has gone up in case of the Goa.

Speaker #3: Understood. I will get back into the Q1. Thank you for taking all my questions, yeah.

Speaker #2: Thank you. We take the next question from the line of Anshu Dayani, from Acquiry. Please go ahead.

Aditya Monga: Understood. I will get back into the queue, ma'am. Thank you for taking all my questions.

Aditya Mongia: Understood. I will get back into the queue, ma'am. Thank you for taking all my questions.

Speaker #6: Hello.

Speaker #4: Yeah.

Speaker #6: Hello. Hi. Hi. Thank you for the opportunity. Two questions. On the platform adjacencies, so if you look at car parking margins, they've been pretty volatile.

Operator: Thank you. We take the next question from the line of Anshul Dani from Macquarie. Please go ahead.

Anshul Dani: Hello?

Anshu Dayani: Hello?

Speaker #6: It's small, I know, but would want to understand better on that. And in terms of daily duty free, we've seen the spend per passenger going up.

Rajesh Arora: Yeah.

Anshul Dani: Hello.

Anshu Dayani: Hello.

Rajesh Arora: Hi.

Anshul Dani: Hi. Thank you for the opportunity. Two questions on the platform efficiencies. If you look at car parking margins, they have been pretty volatile. It is small, I know, but I would want to understand better on that. In terms of Delhi duty-free, we have seen the spend per passenger going up. Is there any mix change, if you could help us with the current mix at the duty-free, and the area also, the physical space at Delhi duty-free? Also, will the space be expanded at Delhi duty-free, or how do we look at the retail area at the Delhi duty-free business?

Anshu Dayani: Hi. Thank you for the opportunity. Two questions on the platform efficiencies. If you look at car parking margins, they have been pretty volatile. It is small, I know, but I would want to understand better on that. In terms of Delhi duty-free, we have seen the spend per passenger going up. Is there any mix change, if you could help us with the current mix at the duty-free, and the area also, the physical space at Delhi duty-free? Also, will the space be expanded at Delhi duty-free, or how do we look at the retail area at the Delhi duty-free business?

Speaker #6: So, is there any mixed change if you could help us with the current mix at the duty free? And the area also or the physical space at daily duty free, also will the space be expanded at daily duty free, or how do we look at the retail area at the daily duty free business?

Speaker #4: Sure. So, in terms of daily duty free, currently we are looking at expanding the space by another 400 to 500 square meter. That's on the arrival side.

Rajesh Arora: Sure. In terms of Delhi duty-free, currently we are looking at expanding the space by another 400 to 500 square meter. That is on the arrival side. That should be available, I would say, by end of this calendar year. In terms of SPP growth in Delhi, which is about 7% to 8%, and this is in line with what the target we have taken it for ourself. Broadly, that is on Delhi. Hyderabad, though you have not asked about Hyderabad. Hyderabad, we have recently expanded our departure area from 400 to 1,300 square meter. The benefit of that we will start seeing in the coming quarters. With the expanded area, we will be able to broad base our offerings. We should expect a better SPP growth in Hyderabad duty-free.

Speaker #4: That should be available, I would say, by end of this calendar year. In terms of SPP growth in Delhi, which is about seven to eight percent, and this is in line with what the target we have taken it for ourselves.

Speaker #4: So, broadly, that's on Delhi. Hyderabad, though you have not asked about Hyderabad, but Hyderabad, we have recently expanded our departure area from 400 to 1300 square meter.

Speaker #4: The benefit of that will start seeing in the coming quarters. You know, with the expanded area, we'll be able to broad base our offerings.

Speaker #4: So, we'll we should we should expect a better SPP growth in Hyderabad duty free. Coming back to your question on car park, I'm not too sure what is the reference point where you've seen the volatility.

Speaker #4: But the car parks SPP as well as the tariff, you know, there has been some increase in tariff, which we have we do it once in three years kind of tariff increase.

Rajesh Arora: Coming back to your question on car park, I am not too sure what is the reference point where you have seen the volatility, but the car parks SPP as well as the tariff, there has been some increase in tariff, which we do it once in three years tariff increase. So that could have had some impact on the EBITDA margins, if that is what you are asking.

Speaker #4: So, that could have had some impact on the EBITDA margins if that is what you are asking.

Speaker #6: So, if I look at this quarter's margin, they've been at 24 percent versus the previous quarter at 30-ish percent. And last year also running at 29, 28 percent levels.

Speaker #6: That is where I was coming from.

Anshul Dani: If I look at this quarter's margin, they have been at 24% versus the previous quarter at 30-ish percent, and last year also running at 29%, 28% levels. That is where I was coming from on car park.

Anshu Dayani: If I look at this quarter's margin, they have been at 24% versus the previous quarter at 30-ish percent, and last year also running at 29%, 28% levels. That is where I was coming from on car park.

Speaker #4: This is this is for Delhi car parks, you're seeing?

Speaker #6: Yes. Yes, that's right.

Speaker #4: Make some some penetrations. I think there must be some some expenses would have come by this. Again, more on a more sustained basis, what we have seen last year on on an annual basis, that is the kind of EBITDA margin we.

Rajesh Arora: This is for Delhi car park you are saying?

Anshul Dani: Yes, that's right.

Anshu Dayani: Yes, that's right.

Speaker #2: Just once again, Amit, why don't you?

Rajesh Arora: Some penetrations. I think must be some expenses would have come by this thing. On a more sustained basis, what we have seen last years on an annual basis, that is the kind of EBITDA margin we-

Speaker #4: And also to note that whenever you look at car park, because as you said, car park has a sticky nature of expenses. There are few expenses which are fixed in nature in terms of maintenance of car park and all.

Saurabh Chawla: Just one second, Amit, why don't you-

Speaker #4: So, because of that, also margin can fluctuate marginally.

Rajesh Arora: And also to note that whenever you look at car park, because as you said, car park has a sticky nature of expenses. There are few expenses which are fixed in nature in terms of maintenance of car park and all. So because of that also margin can fluctuate marginally.

Speaker #6: Okay. Just one one more question, and this is more broader. In terms of next bidding that comes out, so government has outlaid the NMP to in which Amritsar and Trichy and such are posted on, you know, outlined.

Anshul Dani: Okay. Just one more question, and this is more broader in terms of next bidding that comes out. So the government has outlaid the NMP in which Amritsar and Trichy and such airports are in the outline. So would we be looking at bidding, and what is our appetite to participate in loss-making assets going forward?

Anshu Dayani: Okay. Just one more question, and this is more broader in terms of next bidding that comes out. So the government has outlaid the NMP in which Amritsar and Trichy and such airports are in the outline. So would we be looking at bidding, and what is our appetite to participate in loss-making assets going forward?

Speaker #6: So, would we be looking at bidding and what is our appetite to, you know, participate in our loss-making assets going forward?

Speaker #4: So, we will surely look at bidding any new airports that come for privatization. And this we have been always alluding to over the last three to four years.

Speaker #4: Whenever the government has made some noises on the privatizations, but then again, you know, if you look at our whole portfolio, these airports add less than 10 percent of the overall traffic, which is already there in our portfolio.

Saurabh Chawla: We will surely look at bidding any new airports that come for privatization. This we have been always alluding to over the last three to four years, whenever the government has made some noises on the privatizations. But then again, if you look at our whole portfolio, these airports add less than 10% of the overall traffic, which is already there in our portfolio. So every year we are growing actually faster than these airports, even if we were to win. So very early days in that. We would be definitely interested if the price is right. We will bid for these airports at a very rational price and not be in the mode of creating a portfolio which is a loss-making portfolio going forward. So it will be a conservative, judicious bidding that we will undertake.

Speaker #4: So, every year we are growing actually faster than these airports even if we were to win. So, very early days in that, we would be definitely interested if the price is right.

Speaker #4: We will bid for these airports at a very rational price and not be in in in in in the mode of of creating a portfolio, which is a loss-making portfolio going forward.

Speaker #4: So, it will be a conservative judicious bidding that we will undertake.

Speaker #6: Thank you so much.

Speaker #2: Thank you. We take the next question from the line of Hem, Rajesh Raval from Elara Capital. Please go ahead.

Anshul Dani: Thank you so much.

Anshu Dayani: Thank you so much.

Speaker #4: Yeah. Thank you for the opportunity. So, a couple of questions from my end. So, on the SPP increase part, what categories of product segment has the largest headroom to increase your SPP going ahead?

Operator: Thank you. We take the next question from the line of Hem Rajesh Rawal from Elara Capital. Please go ahead.

[Company Representative] (GMR): Yeah, thank you for the opportunity. So a couple of questions from my end. On the SPP increase part, what categories of product segment has the largest headroom to increase your SPP going ahead?

Hem Rajesh Raval: Yeah, thank you for the opportunity. So a couple of questions from my end. On the SPP increase part, what categories of product segment has the largest headroom to increase your SPP going ahead?

Speaker #4: SPP, you know, when you really look at the major contributor to the airports SPP, duty free being the the topmost, then comes retail, then comes F&B, then you have the other categories.

Rajesh Arora: SPP, when you really look at the major contributor to the airport's SPP, duty-free being the topmost, then comes retail, then comes F&B, then you have the other categories. For us, I think the headroom is, I would say it is equally between duty-free retail and F&B. When I say equally between these segments, retail when we are looking at the premiumization of our own offerings, that is where it creates more headroom for us. Duty-free, we all know and understand the kind of value it brings it to the overall SBP growth. So I would say it is equally between these three top categories, while there are other small contributors also there.</seg <seg id="3">Understood. Next question would be if you mentioned you will be open to acquire more airports as and when available. So what would be the return threshold that would be considered as an appropriate when evaluating new airport concession versus investing in existing assets and HSNCs?

Speaker #4: For us, I think the headroom is, I would say it is equally between duty free, retail, and F&B. When I say equally between these segments, retail when we are looking at the premiumization of our own offerings, that is where, you know, it creates more headroom for us.

Speaker #4: Duty free, we all know and understand the kind of value it brings it to the overall SPP growth. So, it's I would say it is equally between these three top categories while there are other small contributors also there.

Rajesh Arora: Duty-free, we all know and understand the kind of value it brings it to the overall SBP growth. So I would say it is equally between these three top categories, while there are other small contributors also there.

Speaker #2: Understood.

Speaker #4: And next question would be like if you mentioned like you will be open to acquire more airports as and when available. So, what would be the return threshold that would be considered as an appropriate when evaluating new airport concession?

Hem Rajesh Rawal: Understood. Next question would be if you mentioned you will be open to acquire more airports as and when available. What would be the return threshold that would be considered as an appropriate when evaluating new airport concession, like versus investing in existing assets and HSNCs?

Hem Rajesh Raval: Understood. Next question would be if you mentioned you will be open to acquire more airports as and when available. What would be the return threshold that would be considered as an appropriate when evaluating new airport concession, like versus investing in existing assets and HSNCs?

Speaker #4: Like what is investing in existing assets and adjacencies? Well, adjacencies are of course a little higher return threshold because the you know, we can we can we can target those higher returns.

Speaker #4: As far as airports are concerned, I think a number which is northward of 16, 17 percent is something that is acceptable and equity IRR.

Saurabh Chawla: Well, HSNCs are of course a little higher return threshold because the nature of that business we can target those higher returns. As far as airports are concerned, I think a number which is northward of 16%, 17% is something that is acceptable. An equity IRR, that is something which we target. But again there's no hard and fast rule because there could be airports which offer much higher potential of growth. And in order to acquire such an asset into our portfolio, we may agree to a slightly higher price to pay in the initial years and then capture the growth over the next 60 odd years as and when those traffic starts to emerge.

Speaker #4: That is that is something which which we target. But again, you know, there's no hard and fast rule because there could be airports which offer much higher potential of growth.

Speaker #4: And in order to acquire such an asset into our portfolio, we may agree to a slightly you know, higher price to pay in the initial years.

Speaker #4: And then capture the growth over the next 60 odd years as and when those traffic starts to emerge. So, there are airports which have an embedded opportunity you know, and and it is only now for us to see how our forecast is and our consultation with the with the with the airlines and and also the the economic footprint that that airport serves.

Saurabh Chawla: So there are airports which have an embedded opportunity, and it is only now for us to see how our forecast is in our consultation with the airlines and also the economic footprint that that airport serves. So that's the way we look at it.

Speaker #4: So, that's the way we look at it.

Speaker #2: Understood. Thank you. That's it from my side. Thank you. Thank you. We take the next question from the line of Karthik Chellappa from Indus Capital.

Speaker #2: Please go ahead.

[Company Representative] (GMR): Understood. Thank you. That's it from my side. Thank you.

Hem Rajesh Raval: Understood. Thank you. That's it from my side. Thank you.

Speaker #6: Yeah. Thank you for the opportunity again, sir. I just have two follow-ups. The first is on Delhi Airport. If I were to look at our non-aero revenues split, what exactly gets classified under others?

Operator: Thank you. We take the next question from the line of Karthik Chellappa from Indus Capital. Please go ahead.

Karthik Chellappa: Yeah. Thank you for the opportunity again, sir. I just have two follow-ups. The first is on Delhi Airport. If I were to look at our non-aero revenue split, what exactly gets classified under others? Because that ratio is now 18%, and I am noticing that steadily that has actually been somewhat inching up. It used to be about 15%, 16%, has now become 18%. So I am just curious to see what all kinds of non-aero revenue gets classified there.

Speaker #6: Because that ratio is now 18 percent, and I'm noticing that steadily that has actually been somewhat inching up. It used to be about 15, 16, and has now become 18.

Speaker #6: So, I'm just curious to see what all kinds of non-aero revenue gets classified there.

Speaker #4: Non-aero revenue consists of I think within within within the within the category of others, which non-aeros are going there. I think that is Karthik's question.

Saurabh Chawla: Non-aero revenue consists of.

Speaker #4: But basically, all the wraps all no, no, you are talking about the non-aero non-aero income or you are talking about others?

Rajesh Arora: Others.

Saurabh Chawla: Within the category of others, which non-aeros are flowing there? I think that is Karthik's question.

[Company Representative] (GMR): Basically all the wraps, all others.

G.R.K. Babu: Basically all the wraps, all others.

Speaker #6: I'm talking about flight 38, non-aero revenue breakup. There is one category called others, which is now 18 percent, and that is actually inched up from 15, 16 percent level in the last several quarters.

Saurabh Chawla: No, you are talking about the non-aero income, or you are talking about others?

Speaker #6: So, I'm just curious to understand what exactly goes under others.

Karthik Chellappa: I am talking about slide 38, non-aero revenue breakup. There is one category called Others, which is now 18%, and that has actually inched up from a 15%, 16% level in the last several quarters. So I am just curious to understand what exactly goes under Others.

Speaker #4: Just one second, Karthik. Just let's start.

Speaker #6: Sure, sure. I mean, we can take it offline also if if it's okay. I have no issues. I was just curious to see whether you had it readily with you.

Saurabh Chawla: Just one second, Karthik. Just let's.

Speaker #4: What is this breakup? There are there are so many small, small items, like flight catering, car rentals, and some other like wrapping of the bags.

Karthik Chellappa: Sure. We can take it offline also if it is okay. I have no issue. I was just curious to see whether you had it readily with you.

Saurabh Chawla: It seems simple. What is the breakup here?

Speaker #4: There are so many other, like ATMs, small, small businesses will be there which are all combined under others. In case of the non-aero.

[Company Representative] (GMR): There are so many small items like flight catering, car rentals, and some other like wrapping of the bags. There are so many other like ATMs. Small businesses will be there, which are all combined under Others in case of the non-aero.

G.R.K. Babu: There are so many small items like flight catering, car rentals, and some other like wrapping of the bags. There are so many other like ATMs. Small businesses will be there, which are all combined under Others in case of the non-aero.

Speaker #6: So, so the increase in the ratio to 18 percent is pretty much like organic, basically. It's just that they have been growing fast of a lower base.

Speaker #6: Is that how we should read it?

Speaker #4: No. Maybe some other additional, for example, some advertisement like cars they advertise in the terminal. Suddenly you may get in one quarter additional revenue, and which is grouped under others.

Karthik Chellappa: The increase in the ratio to 18% is pretty much organic basically. It is just that they have been growing fast off a lower base. Is that how we should read it?

[Company Representative] (GMR): No, maybe some other additional, for example, some advertisement like cars they advertise in the terminal. Suddenly you may get in one quarter additional revenue and which is grouped under Others. Which is not seasonal. Maybe some seasonal business must have got it, then it will be grouped under that.

G.R.K. Babu: No, maybe some other additional, for example, some advertisement like cars they advertise in the terminal. Suddenly you may get in one quarter additional revenue and which is grouped under Others. Which is not seasonal. Maybe some seasonal business must have got it, then it will be grouped under that.

Speaker #4: So, which is not seasonal. Maybe some seasonal business must have got it, then it will be grouped under that.

Speaker #6: Okay. Excellent. And my last question, sir, is just on data point. If I were to look at your duty free revenue for both Delhi and Hyderabad on a year-on-year basis, would you be able to share what is the percentage of passengers who generated duty free revenue for you?

[Company Representative] (GMR): Okay, excellent. My last question, sir, is just on data point. If I were to look at your duty-free revenue for both Delhi and Hyderabad on a year-on-year basis, would you be able to share what is the percentage of passengers who generated duty-free revenue for you?

G.R.K. Babu: Okay, excellent. My last question, sir, is just on data point. If I were to look at your duty-free revenue for both Delhi and Hyderabad on a year-on-year basis, would you be able to share what is the percentage of passengers who generated duty-free revenue for you?

Speaker #4: That's called penetration, you are talking about it.

Speaker #6: Yes, exactly. On a year-on-year basis, I'm just curious to see how that has changed.

Speaker #4: So, the penetration generally in duty free business will be about 14 percent or so in Delhi. Hyderabad will be about 11 to 12 percent kind of penetration.

[Company Representative] (GMR): That's called penetration, you are talking about it.

G.R.K. Babu: That's called penetration, you are talking about it.

Karthik Chellappa: Yes, exactly. On a year-on-year basis, I'm just curious to see how that has changed.

Speaker #4: That generally is the we have seen the trend in the last few years. And that's on the international traffic.

Rajesh Arora: The penetration generally in duty-free business will be about 14% or so in Delhi. Hyderabad will be about 11% to 12% kind of penetration. That generally is the-- We have seen that trend in the last few years. That's on the international

Speaker #6: And the 14 percent will be what a year ago? First quarter 2026 is 14 percent would have been what percentage?

Speaker #4: Similar, similar it should be it should be on the similar lines. Only thing is, you know, like Goa, if you see because of the stoppage of Gatwick flight, it may have had some impact.

Karthik Chellappa: And the 14% will be what a year ago? Q1 2026 is 14% would have been what percentage?

Speaker #4: In terms of penetration, but generally this is the this is the trend we have seen all all across, you know, not much of variation between the quarters.

Rajesh Arora: It should be on the similar lines. Only thing is like Goa, if you see because of the stoppage of Gatwick flight, it may have had some impact in terms of penetration. But generally this is the trend we have seen all across.

Speaker #6: Okay. Okay. This is very helpful. Thank you, sir. Thank you very much and wish you all the very best.

Speaker #2: Thank you. We take the next question from the line of Prateek Kumar from Jefferies. Please go ahead.

GRK Garu: Not much of variation between the quarters.

Rajesh Arora: Not much of variation between the quarters.

Karthik Chellappa: Okay. This is very helpful. Thank you, sir. Thank you very much, and wish you all the very best.

Speaker #4: Yeah. Thank you for the opportunity again. I have like two follow-up questions. Firstly, sir, how do we see consolidated capex for FY27 and 28, and could you provide backup of the projects and the broad scope of planned capex?

Operator: Thank you. We take the next question from the line of Prateek Kumar from Jefferies. Please go ahead.

Prateek Kumar: Yeah. Thank you for the opportunity again. I have two follow-up questions. Firstly, sir, how do we see consolidated CapEx for FY27 and 28, and could you provide breakup of the projects and the broad scope of planned CapEx?

Speaker #4: In case of the there is no capex planned basically we got only operational capex. The estimated operational capex or maintenance capex, we call it, between the Delhi and Hyderabad may be around 50 rupees for the full financial year.

GRK Garu: In case of there is no distinct CapEx planned. Basically, we have got only operational CapEx. The estimated operational CapEx or maintenance CapEx, we call it, between the Delhi and Hyderabad may be around INR 1,500 to 1,600 crore for the full financial year. We may also incur CapEx in Nagpur for the refurbishment, which could be in the range of INR 250 to 300 crore.

G.R.K. Babu: In case of there is no distinct CapEx planned. Basically, we have got only operational CapEx. The estimated operational CapEx or maintenance CapEx, we call it, between the Delhi and Hyderabad may be around INR 1,500 to 1,600 crore for the full financial year. We may also incur CapEx in Nagpur for the refurbishment, which could be in the range of INR 250 to 300 crore.

Speaker #4: And we may also incur capex in Nagpur for the refurbishment, which could be in the range of 250 to 300 crore rupees. So, consolidated capex for FY27 could be and including real estate capex could be like closer to 2,500 crores for FY27, 27?

Speaker #4: Yeah, yeah. You can take it. No, no, no. You see, like GRK Garu said, the operational capex is about 1,500 odd crores. Another 250 odd crores is the capex for refurbishment at Nagpur.

Prateek Kumar: So console CapEx for FY27 could be, and including real estate CapEx, so could be closer to INR 2,500 crore for FY27?

GRK Garu: Yeah. You can take it.

G.R.K. Babu: Yeah. You can take it.

Saurabh Chawla: No. You see, like GRK Garu said, the operational CapEx is about INR 1,500 odd crores. Another INR 250 odd crores is the CapEx for refurbishment at Nagpur.

Speaker #4: 1,800 to 1,900. It's about 1,800, 1,900 crores. The real estate capex, the building five, which which is which is currently under construction, is actually getting completed within the current fiscal year.

Speaker #4: So, maybe about 50 or 100 crores more that may go oh, sorry, 200 crores may go. So, in total, about 2,000 odd crores is a number that you can assume for the full fiscal 27.

Prateek Kumar: Or INR 1,800 to INR 1,900.

Saurabh Chawla: About INR 1,800, INR 1,900 crores. The real estate CapEx, the building 5 which is currently under construction, is actually getting completed within the current fiscal year. Maybe about INR 50 or INR 100 crores more, that may go. Or, sorry, INR 200 crores may go. So in total, about INR 2,000 odd crores is a number that you can assume for the full fiscal 2027.

Speaker #6: Sure. And do we have any update on SRAB case regulatory decision timing or dates for the Delhi airport?

Speaker #4: The hearings are happening now in the Supreme Court. The appellant hearings are happening. And then our the turn will come. Most probably maybe it should be settled in the next three to six months.

Prateek Kumar: Sure. Do you have any update on HRAB case regulatory decision timing or dates for the Delhi airport?

GRK Garu: The hearings are happening now in the Supreme Court. The appellate hearings are happening. Our turn will come. Most probably, maybe it should be settled in the next 3 to 6 months.

Prateek Kumar: The hearings are happening now in the Supreme Court. The appellate hearings are happening. Our turn will come. Most probably, maybe it should be settled in the next 3 to 6 months.

Speaker #6: Okay. And last question. On new I mean, while FY26 for comments of the company was significantly boosted by significant scale-up in platform revenues, added by WTC and cargo business integrations, how do we see like or what kind of new meaningful opportunities which may get added to platform which can help like in the run rate of business?

Prateek Kumar: Okay. Last question, on new, while FY26 performance of the company was significantly boosted by significant scale-up in platform revenues added by Delhi T3 and cargo business integrations. How do we see, or what kind of new meaningful opportunities which may get added to our platform, which can help in the run rate of business growth continuing into next 3 years?

Speaker #4: So, you know, I can't really predict Prateek as to what happens from an inorganic perspective. You know, that gets added on. What will surely come is addition of Bhogapuram non-aero.

Saurabh Chawla: I can't really predict, Pratik, as to what happens from an inorganic perspective that gets added on. What will surely come is addition of Guntur non-aero. There will be a small addition that will come at Nagpur non-aero. These are, I would consider them as now organic in nature because they're part of our portfolio. Having said that, the business development teams are looking at many such opportunities in the region. As I've already highlighted in the past, non-aero capital light opportunities is a focus area for us, whether it is domestic or international, whether it is in Middle East or Southeast Asia. That is something that we are definitely interested in. These are again, very lumpy, success-driven. So focus is there. On an organic basis, I think the business will grow at about 15% to 18% on a secular basis.

Speaker #4: There'll be a small addition that will come at Nagpur non-aero. These are I would consider them as now organic in nature because they are part of a portfolio.

Speaker #4: But having said that, the business development teams are looking at many such opportunities in the region. And and, you know, as I've already highlighted in the past, non-aero capital light opportunities is a focus area for us, whether it is domestic or international, whether it is in Middle East, Southeast Asia.

Speaker #4: That is something that, you know, we we are definitely interested. And but these are again very lumpy success-driven. So, focus is there. On an organic basis, I think the business will grow at about 15 to 18 percent on a secular basis.

Speaker #4: That is something that that we are we have already highlighted. You can assume 15 percent for sure. In good years, I have once the traffic starts to improve, you know, 18 percent is also not very far away.

Saurabh Chawla: That is something that we have already highlighted. You can assume 15% for sure. In good years, once the traffic starts to improve, 18% is also not very far away.

Speaker #6: Yeah. Thank you, sir. These are my questions and all the best.

Speaker #2: Thank you. We take the next question from the line of Aditya Monge from Kotak Institutional Equity. Please go ahead.

Prateek Kumar: Yeah. Thank you, sir. These are my questions, and all the best.

Speaker #6: Sir, thank you for the following opportunity. A couple of more questions from my side. A, on real estate, whatever you are going to monetize in fiscal 28, could you give us a sense of what will be the investment size that you have gone from your side?

Operator: Thank you. We take the next question from the line of Aditya Monga from Kotak Institutional Equities. Please go ahead.

Aditya Monga: Sir, thank you for the forum opportunity. A couple of more questions from my side. A, on real estate, whatever you are going to monetize in fiscal 2028, could you give us a sense of what will be the investment size that could have gone from your side? B, what could be the quantum that we can anticipate against that?

Aditya Mongia: Sir, thank you for the forum opportunity. A couple of more questions from my side. A, on real estate, whatever you are going to monetize in fiscal 2028, could you give us a sense of what will be the investment size that could have gone from your side? B, what could be the quantum that we can anticipate against that?

Speaker #6: And B, what would be the quantum that you can reap in fiscal 28 against that?

Speaker #4: One second. I'll ask Aman to just respond to it. So, this is a 1 million. So, Aman, what is the capital cost of that and what is the opportunity three years or two years down the road on the monetization of it?

Saurabh Chawla: One second. I will ask Aman to just respond to it. This is a 1 million square feet of commercial office development which is underway. Aman, what is the capital cost of that, and what is the opportunity 2 years down the road on the monetization of it? What is the value? Just one second.

Speaker #4: What is the value? Just one second.

Speaker #6: Sure. Thanks.

Speaker #4: Yeah. So, the the usable area of the building is about 650,000 square feet. We expect to achieve average rental for this building upwards of 240 rupees.

Aditya Monga: Sure. Thanks.

Aditya Mongia: Sure. Thanks.

Saurabh Chawla: Yeah. The usable area of the building is about 650,000 square feet.

Speaker #4: And accordingly, you know, I think the value kind of derived from that, the current market caps are in the seven and a half to eight percent range.

Saurabh Chawla: We expect to achieve average rental for this building upwards of INR 240. Accordingly, I think the value derived from that, the current market caps are in the 7.5% to 8% range. I expect to get that value.

Speaker #4: I expect to get that value.

Speaker #6: And what will be the investment against this quantum that we would be doing ending up doing maybe early FY27 when it is complete?

Speaker #4: Our construction budget construction hard and soft cost budget is 450 crores. There are some additional manpower costs that are that maybe maybe taken up to about 500 crores.

Aditya Monga: What will the investment against this quantum that we would be ending up doing maybe early FY27 when it is complete?

Aditya Mongia: What will the investment against this quantum that we would be ending up doing maybe early FY27 when it is complete?

Saurabh Chawla: Our construction budget, construction hard and soft cost budget is INR 450 crores. There are some additional manpower costs that maybe take it up to about INR 500 crores.

Speaker #6: So, and this monetization can be assumed to happen in fiscal 28 or should we think of fiscal 29?

Speaker #4: Yeah. I think fiscal 28 is a reasonable estimate.

Aditya Monga: This monetization can be assumed to happen in fiscal 2028, or should we think of fiscal 2029?

Aditya Mongia: This monetization can be assumed to happen in fiscal 2028, or should we think of fiscal 2029?

Speaker #6: Okay. The second list of questions I had was more at a broad portfolio level. And thanks for sharing the non-aero part, but wanted to focus a little bit more on the passenger spending patterns.

Saurabh Chawla: Yeah, I think fiscal 2028 is a reasonable estimate.

Speaker #6: So, could you give us a sense of, let's say, again, three crores spenders that could have come for this quarter? How many transactions would have happened by in a different manner?

Aditya Monga: Okay. The second list of questions I had was more at a broad portfolio level. Thanks for sharing the non-aero fact, but wanted to focus a little bit more on the passenger spending patterns. Could you give us a sense of, let's say, again, 3 crore passengers that could have come for this quarter, how many transactions would have happened by those passengers? It just gives us a sense of penetration in a different manner. Okay. One passenger may be doing more than one transaction as well. That's also fine. But some sense of number of transactions against 3 crore passengers that have happened for this quarter, and what is the average spending that happens per transaction?

Aditya Mongia: Okay. The second list of questions I had was more at a broad portfolio level. Thanks for sharing the non-aero fact, but wanted to focus a little bit more on the passenger spending patterns. Could you give us a sense of, let's say, again, 3 crore passengers that could have come for this quarter, how many transactions would have happened by those passengers? It just gives us a sense of penetration in a different manner. Okay. One passenger may be doing more than one transaction as well. That's also fine. But some sense of number of transactions against 3 crore passengers that have happened for this quarter, and what is the average spending that happens per transaction?

Speaker #6: Okay. And one passenger may be doing more than one transaction as well. That's also fine. But some sense of number of transactions against three crore passengers that have happened for the quarter.

Speaker #6: And what is the average spending that happens per transaction?

Speaker #4: So, Aditya, you know, this penetration you know, it varies from category to category. As I just mentioned in my one of the previous questions, the penetration or in case of, say, daily duty-free is in the range of what, 14 percent.

Rajesh Arora: Aditya, this penetration, it varies from category to category. As I just mentioned in one of the previous questions, the penetration, or in case of, say, Delhi Duty Free, is in the range of about 14%. Hyderabad is 11% to 12%. When you go to F&B, if you talk about the broader spectrum of non-aero, when you go to F&B, it will have a different set of penetration. So it varies from category to category. If I can know your specific question that what do you want to understand from that, I can answer it more specifically. Or maybe we can do it offline along with Amit if needed, Aditya. If you want to go slightly deeper into that.

Speaker #4: Hyderabad is 11 to 12 percent. When you go to FNB, if you talk about the broader spectrum of non-aero, when you go to FNB, it will have a different set of penetration.

Speaker #4: So, it varies from day to day. If I can know your specific question, that's what do you want to understand from that, I can I can answer it more specifically.

Speaker #4: Or maybe we can we can do it offline along with Amit if needed. If you if you have want to go slightly deeper into that.

Speaker #6: Understood. No, I think I'll just give you a sense of what I'm asking and if it can come in the presentation even that would be great from next time onwards.

Speaker #6: Just a sense of how many transactions are happening in the per transaction value. For the quarter. It will be a mix of things I get that.

Aditya Monga: Understood. No, I'll just give you a sense of what I'm asking and if it can come in the presentation, even that would be great from next time onwards. Just a sense of how many transactions are happening and the per transaction value for the quarter. It'll be a mix of things, I get that, but it will give us a sense of things potentially.

Aditya Mongia: Understood. No, I'll just give you a sense of what I'm asking and if it can come in the presentation, even that would be great from next time onwards. Just a sense of how many transactions are happening and the per transaction value for the quarter. It'll be a mix of things, I get that, but it will give us a sense of things potentially.

Speaker #6: But it will give us a sense of things certainly.

Speaker #4: Yeah. Sure. So, Aditya, the the way to look at this, you know, we look at STP for sales packs. We stake into consideration the two components.

Speaker #4: One is the average ticket value. What is the amount you are spending? And the penetration. So, a combination of that gives you the SPP.

Rajesh Arora: Yeah, sure. Aditya, the way to look at this, we look at SPP or sales per pax.

Speaker #4: So, our focus generally is on SPP. The strategy to grow SPP could be based on improving penetration or increasing ATV. That depends on how do you want to look at the whole thing.

Rajesh Arora: Which takes into consideration the two components. One is the average ticket value, what is the amount you are spending, and the penetration. So a combination that gives you the SPP. So our focus generally is on SPP. The strategy to grow SPP could be based on improving penetration, on increasing ATV. That depends on how you want to look at the whole thing. But our focus is to keep growing the SPP year-on-year, and which I have been saying in the range of about 7% to 8% is our target.

Speaker #4: But our focus is to keep growing the SPP year on year and which I have been saying, say, in the range of about seven to eight percent is our target.

Speaker #6: Understood. That will be also my side. Thank you for your responses.

Speaker #2: Thank you. Ladies and gentlemen, as there are no further questions from the participants, I would now have the conference over to Mr. Saurabh Chawla for his closing comments.

Aditya Monga: Understood. That will be all from my side. Thank you for your response.

Aditya Mongia: Understood. That will be all from my side. Thank you for your response.

Speaker #4: Yeah. Thank you. Thank you, everybody, for joining this call at an early hour today. We are happy to to engage with you offline. And the IR team awaits any of your specific questions that you may have.

Operator: Thank you. Ladies and gentlemen, as there are no further questions from the participants, I will now hand the conference over to Mr. Saurabh Chawla for his closing comments.

Saurabh Chawla: Yeah, thank you. Thank you everybody for joining this call at an early hour today. We are happy to engage with you offline, and the IR team awaits any of your specific questions that you may have. We will be happy to answer. Thank you so much and have a wonderful day. Thank you.

Speaker #4: We'll be happy to answer. Thank you so much and have a wonderful day. Thank you.

Speaker #2: Thank you, sir. On behalf of GMR Airports Limited, that concludes the conference call. Thank you for joining us. And you may now disconnect your line.

Operator: Thank you, sir. On behalf of GMR Airports Limited, that concludes this conference call. Thank you for joining us, and you may now disconnect your line.

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Q1 2027 GMR Airports Ltd Earnings Call

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