Operator: Ladies and gentlemen, you have been connected for GMR Airports Limited conference call. The call is expected to begin in two minutes. Kindly hold the line. Do not disconnect. Please note that you have been connected to GMR Airports Limited conference call. The call is expected to begin in 2 minutes. Thank you. Ladies and gentlemen, good day and welcome to GMR Airports Limited conference call to discuss Q2 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, Finance and Strategy.
Operator: 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 risks 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.
Saurabh Chawla: Thank you, Michelle, and good morning, everyone. Q2 was characterized by mixed operating environment while passenger traffic growth remained soft, as we had been eluding since May of 2026, reflecting short-term industry challenges. Our conviction in the long-term outlook for Indian aviation remains unchanged. The structural drivers of growth continue to strengthen from fleet expansion and international network development to rising mobility demand and emergence of India as a global aviation hub. Very recently, Lufthansa Group announced that it will increase flight frequencies to key Indian cities, including Delhi, Bengaluru, Hyderabad, and Chennai as part of its largest summer network expansion since 2020. Air India is also expanding its network. It will introduce flights between New Delhi and Osaka in Japan, making Air India the only airline operating the Delhi-Osaka route. Simultaneously, it is also enhancing frequencies to Australia.
Saurabh Chawla: IndiGo's new aircraft deliveries have crossed 40 for 2026 and is adding more routes and frequencies. Boeing has now secured certification for its 737 MAX 10, the largest member of its 737 MAX family, clearing a major hurdle for the American aircraft manufacturer and bringing an aircraft delayed for years closer to service. This will support airlines like Akasa Air and Air India to further their offerings and increase capacities. Emirates has also expanded its premium economy offering to all flights to and from Delhi and Kolkata. It is also introducing its flagship Airbus A380 aircraft for the first time on one of its four daily frequencies from Delhi. As for the airline, the Indian market has matured and there is extremely high demand for travel. As such, our medium and long-term confidence remains intact.
Saurabh Chawla: What is particularly encouraging is the resilience of our business model, which extends well beyond passenger volumes. During the quarter, we continued to see healthy performance in non-aeronautical revenues. Cargo throughput at both Delhi and Hyderabad reached record levels for H1 of fiscal 2027, underscoring the growing importance of cargo as a strategic growth engine. I will discuss this in greater details on the developments on a consumer platform later during my opening remarks. We are also progressing on our third revenue stream that is the real estate. Our own self-development as well as third-party projects are witnessing good execution pace. These trends demonstrate that while passenger traffic may experience periods of moderation, the broader airport ecosystem continues to create value through multiple avenues of growth. On that note, let me now delve deeper into Q2 performance.
Saurabh Chawla: Momentum in total income continued with Q2 at INR 41.9 billion, up 12% year-on-year. EBITDA for the quarter grew 2% year-on-year to INR 15.7 billion. PAT for the quarter came in at INR 654 million versus INR 351 million in Q2 of fiscal 2026. Reported quarterly PAT has remained positive for the fifth consecutive quarter. This demonstrates the strength in our business model as our financial performance has demonstrated growth even in these challenging global macro environment. Consolidated net debt, which excludes the FCCBs of INR 29.1 billion, which are deep in money, remained unchanged versus the last quarter as well as versus the Q2 of fiscal 2027 at INR 340 billion. Like we have been guiding, net debt has peaked with the completion of the Vizag or Bhogapuram Airport.
Saurabh Chawla: On the operational front, traffic at GAL-operated airports rose 1% year-on-year in Q2 fiscal 2027, reaching 28 million passengers. This excludes Cebu, but includes Nagpur and Vizag from the date of operationalization. For H1 2027 as well, traffic was up 1% year-on-year from 58.4 million passengers, despite the traffic for India as a whole seeing a decline of 3%. Total income at Delhi Airport rose 13% year-on-year to INR 20.8 billion in Q2. Aero revenues rose 5% year-on-year, and non-aero revenues increased 20% year-on-year. For the H1 of fiscal 2027, total income was up 15% year-on-year to INR 41.5 billion. Aero yield per pax and non-aero SPP for Q2 fiscal 2027 were highest in five years. EBITDA for Q2 was up 12% year-on-year to INR 7.6 billion and was up 12% for the H1 to INR 14.6 billion.
Saurabh Chawla: The airport has reported profit of INR 1.2 billion for Q2 FY 2027, the sixth consecutive quarter of PAT positive. At Hyderabad, total income for Q2 was INR 6.3 billion, down 6% year-on-year, as aero revenues fell 8% year-on-year on lower traffic. However, non-aero revenues increased by about 5% year-on-year, and the airport achieved a record non-aero SPP of INR 330 in Q2 FY 2027. Total income for H1 stood at INR 12.6 billion, down 3% year-on-year. EBITDA for Q2 was down 7% year-on-year at INR 4 billion, down 3.5% to INR 7.9 billion for H1. PAT for the quarter was INR 907 million, down 9% year-on-year. Here again, I want to highlight one aspect that how the non-aero has really picked up and the consumer platform is now thriving despite some softness in the airline passenger growth.
Saurabh Chawla: Mopa or Goa Airport reported total income of INR 1 billion in Q2, up 25% year-on-year, and INR 2.3 billion in H1 2027, up 24%. Aero revenues increased 35% year-on-year as tariffs reverted to normal post discontinuation of Special Initiative Plan. Non-aero revenues decreased by 5% year-on-year. However, non-aero SPP was up 25% year-on-year to INR 228. EBITDA doubled year-on-year in Q2, coming to INR 244 million. Notable achievements during the quarter are combined aero yield per pax or YPP in Q2 FY 2027 was INR 497 for Delhi, Hyderabad, Mopa, Vizag, and Nagpur. Non-aero income per pax or SPP was INR 772, and this includes revenues from non-aero businesses adjusted for the revenue share they paid to the respective airports and non-aero revenues reported by Indian airport entities.
Saurabh Chawla: To clarify, MRO and Hyderabad Hospitality, which is predominantly the hotel, are not part of the above SPP number. Non-aero and aero performances improved sequentially despite muted traffic. Coming to our non-aero adjacency businesses, GMR Hospitality Limited, a 70% subsidiary of GAL which operates the F&B business, won the concession for operating the F&B outlets at Delhi Airport Terminal 3. This was earlier being operated by a JV where GAL's stake was 40%. GAL consolidated financials will start reflecting this from Q3. GAL, the master concessionaire, also started operationalizing non-aero concessions at Vizag Airport. In cargo, GMR Cargo and Logistics Limited entered into a licensing agreement with FedEx for the operation of express cargo terminal at Cargo City in Delhi Airport, while Hyderabad Airport signed an MoU with Brussels Airport to strengthen the air cargo connectivity between Hyderabad and Europe.
Saurabh Chawla: Construction on multiple airport land development projects is underway, details of which are available in the results presentation. FY 2027 will see a handover of DIAL's first self-development commercial buildings at Delhi Aerocity, where pre-leasing discussions are already underway. The indicative rentals are in excess of INR 250 per month. I am told just now that one tenant will be signing a deal at actually about INR 270 per square foot per month. The build to suit terminal hotel, Taj Delhi International, with 380 keys is also planned to start partial operations from Q4. We have also begun work on the self-development hotel, which is about 500 keys at Delhi Aerocity, which will be operated under Hilton and Waldorf Astoria brands. Again, I want to highlight over here, the premiumization of the land parcel reflects now the type of brands that are getting attracted.
Saurabh Chawla: Waldorf Astoria is coming to Aerocity, Delhi. At Vizag Bhogapuram, the hotel under Vivanta brand, which is about 150 keys, is expected to be handed over in phases within fiscal 2027. During the quarter, we saw multiple credit rating upgrades. Standard and Poor's upgraded Delhi Airport's credit rating on senior secured notes to double B plus from double P. At Hyderabad, S&P and Fitch both upgraded the ratings to triple B minus, taking it to international investment grade. Even at GAL, the listed entity, ratings were upgraded to double A minus by CRISIL and CARE. On refinancing activities, Delhi Airport raised INR 35 billion through a 15-year non-convertible debentures at 8.7% against the effective cost of 9%, to refinance the $522 million of notes at $522 million notes, which had an effective cost of 10.9%.
Saurabh Chawla: GAL also raised INR 15 billion in form of non-convertible debentures at 9.56 and used the proceeds to refinance existing debt, bearing 10.75% interest. In summary, the costs of all refinancings are on downward trajectories. On the regulatory front, the Hyderabad Airport implemented a new tariff issued by AERA for the fourth control period. Weighted average YPP for 5 years has been maintained at INR 538, assuming no expansion CapEx, and increases to 640 including expansion CapEx. For Vizag Airport, AERA has issued a consultation paper pertaining to tariff order for the first control period. Also, TDSAT, the appellate tribunal, issued a favorable judgment on all issues pertaining to Delhi Airport CP4 tariff order issued by AERA, which were appealed against by us, including appeals pertaining to the non-implementation of the previous TDSAT order. AERA has 3 months to implement this unless they further appeal.
Saurabh Chawla: During the quarter, GAL issued 102 million equity shares to Groupe ADP subsidiary post the notice of the conversion of 2.5 million optionally convertible redeemable preference shares or OCRPS. These were issued in accordance with the terms of merger of the erstwhile airport holding company with the listed entity, where the conversion ratio was agreed as 1 is to 40. The merger scheme entailed ADP converting part of its voting equity into OCRPS. As of now, ADP has sold part of its equity of 3.4% to the GMR family. It has decided to convert part of these OCRPS holding into equity to maintain the ratio between the two promoters, which is GMR and ADP to 51/49. On fully diluted basis, the total equity issued and converted remains the same.
Saurabh Chawla: At GMR, we firmly believe that integrating ESG principles is crucial for airport operators to build resilient operations, mitigate risks, and secure a license to grow within the evolving regulatory and community expectations. The ESG achievements highlighted in our investor presentation reflect our commitment to responsible growth while maintaining higher standards of governance, safety, and operational excellence. In closing, I would like to reiterate that our business performance has shown resilience despite the temporary muted traffic numbers. Our debt has peaked, and we maintain our outlook for free cash generation at our two largest airports and the listed entity in the medium term. The presentation with all financial numbers are already available with you. If not, you can download it from the IR section of our website. We are available to respond to your questions on this call, online and offline.
Saurabh Chawla: Now I would like to open the forum for queries that may be addressed by my colleagues from the corporate and the business teams. Thank you so much.
Operator: Thank you very much, sir. Ladies and gentlemen, we will now begin with the question and answer session. Anyone who wishes to ask questions may please press star and one on their touchtone phone. If you wish to withdraw yourself from the question queue, you may press star and two. Participants are requested to use only your handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. The first question is from the line of Prateek Kumar from Jefferies. Please go ahead.
Prateek Kumar: Yeah. Hi, good morning, sir. I have two, three questions. Firstly, congrats for strong non-aero performance execution. Strong non-aero revenue growth. But sir, your overall revenue performance has actually not shown through to EBITDA. Your total revenue is higher by around 12%, and EBITDA is kind of flattish. I know traffic was weak, but your non-aero revenue performance has not reflected in EBITDA performance. Any reasons there? Because particularly your SPVs seem to do better, airport SPVs, but your platform level performance is lower year on year. Can you discuss this question?
Saurabh Chawla: Sure, Prateek.
[Company Representative] (GMR Airports Limited): Okay. Because the traffic has been lower, the aeronautical revenue is lower, whereas the expenses remain the same. Whereas non-aero still has grown. Of course, at the level of EBITDA, there is not much growth because of the lower traffic.
Prateek Kumar: No, but your total revenue is still higher, right? So revenue is higher and non-aero is much higher. Your platform performance actually, stripping out the SPV performance, it seems like flat to lower year-on-year, which is dragging down the overall performance or consolidated level.
Saurabh Chawla: Prateek, you have to take into context that Vizag has got added, right, during the quarter. And obviously that will have some impact on the EBITDA numbers as such. If you were to actually exclude the Vizag consolidation, then you will see a pretty decent growth on the EBITDA numbers also. So you have to take that into account. Second also is Goa. So both Vizag and Goa have had some downward impact on the EBITDA numbers.
Prateek Kumar: Okay. Other question is your aero YPP have been very high in both Delhi and Hyderabad, versus your expected run rate at these two airports at 360 and 540. What would be the key reasons there?
[Company Representative] (GMR Airports Limited): No, in case of Delhi, the YPP 365 which the regulator has given has gone up more than INR 440, mainly because of the, we have introduced in case of the parking, the dynamic pricing. So first four hours is only fixed, thereafter, it keeps on doubling for every four hours. So it becomes five times by 524 hours. So most of the airlines, wherever they are parking them for more than 12 hours, they have to pay more money. So the parking charges has contributed a substantial amount, which has helped us to improve our yield per pax. In case of Hyderabad Airport, basically, the transfer pax has been assumed at a higher level, but the transfer pax has come down whereas the pax number has been maintained, which has helped us improve the yield per pax in case of Hyderabad also. These are the two major reasons.
Prateek Kumar: Just clarifying on Delhi, so is this run rate we should assume for this control period, remaining control period?
[Company Representative] (GMR Airports Limited): No, we can't assume for the entire control period because now the airlines are also realizing that they are paying more. Then slowly they are trying to turn around the aircrafts much faster. So maybe another one year the run rate may be there, but after that it will flat down. It will go back to the normal rate.
Prateek Kumar: Okay, and this will be counted as over-recovery for next control period for tariff determination?
[Company Representative] (GMR Airports Limited): You are absolutely right.
Prateek Kumar: Lastly, on your interest expense, it seems to have gone up by 6%, 7%. Sir, your debt has been flat. Company is seeing improvement in credit rating, but interest expense still has gone higher QoQ. Where do you see this settling, despite flattish debt expectation?
[Company Representative] (GMR Airports Limited): At console level, the interest expenses have gone up mainly because of the capitalization of the Bhogapuram Airport, which has started operation on 17 August. So till that date it was getting capitalized, now it is hitting the P&L account. That is why interest rates have gone up. Interest amount has gone up.
Prateek Kumar: Should that settle for next year, like annualized interest outflow for the company?
[Company Representative] (GMR Airports Limited): It should be. I mean, over a period of time, the rate remains the same.
Saurabh Chawla: Primarily, Prateek, as the debt comes off, as we have said, debt has peaked now. As the principal amounts start getting paid and the debt comes off, the interest number will start to wear down now. We are not taking any significant debt, fresh debt for any major expansion at any airport right now.
[Company Representative] (GMR Airports Limited): The next two quarters will reflect the full interest of the Vizag Airport. Thereafter, it will stabilize.
Prateek Kumar: Sure. Thank you. I have more questions. I will get back to you.
Operator: Thank you. We will take the next question from the line of Shubham Borade from ICICI Securities. Please go ahead.
Shubham Borade: Thanks for the opportunity. I have two questions. First one, can you please help us with the profit for Bhogapuram and Nagpur separately during the quarter? Second would be, on the development of 1 million square feet at Delhi, can you please help us with the timeline of leasing the total space? Thank you.
[Company Representative] (GMR Airports Limited): Vizag airport just started operations, so it has posted a loss of INR 82 crore for the second quarter. As far as Nagpur airport, it is a full quarter performance. So we have posted a PAT of about INR 8 crore. Bhogapuram, that is Vizag airport.
Shubham Borade: Ad hoc tariff because currently it is-
[Company Representative] (GMR Airports Limited): No, basically the loss which we have posted INR 82 crore is because of the ad hoc tariff we are there. As you know that consultation paper is already out. We are expecting the full tariffs will come by January, and thereafter it will taper down the loss. This Q3 also we are likely to get the same loss.
Shubham Borade: Sir, second question was, can you please help us with the timeline of leasing the 1 million square foot space at Delhi Airport?
Saurabh Chawla: Yeah. The leasing momentum is very strong. The completion of the project is stated for end of financial year, Q4 of FY27. We have recently concluded a transaction of about 80,000 square feet at INR 270 a square feet. The pipeline looks very strong. We expect to have leasing completed within six to nine months, into the next financial year.
Shubham Borade: Sure, sir. Thank you.
Operator: Thank you. We will take the next question from the line of Achal Kumar from HSBC. Please go ahead.
Achal Kumar: Yeah, hi. Thanks for taking my question. I have two questions, actually. The first one, you had mentioned on slide 15 that the traffic is stronger in the H2. What gives you that kind of confidence? Is it just because of the festival season, or you see the traffic because ultimately the fuel has further gone up, and probably the fares could further go up. How do you see the traffic? That is my first question. Secondly, what plans do you have to put your GHL unit further? You got the bid to operate F&B at Delhi Airport. What else? Do you have any other further plan to your GHL business? Thanks.
Saurabh Chawla: You must understand that we have seasonality in our business. The H2 of every fiscal year is much stronger than the H1. It is the busy season, it is also the festive season, and there is lot of international traffic, friends and family that flows in the month of December and January. That is the first aspect which gives us the confidence that the H2 will be much stronger than the H1. Second is that we get insight into the airline slot asks. It is not something that people just fly from one place to the other place. It has to be planned well in advance. The airlines ask for certain slots, and based on those slots and outlooks is how we give an outlook to the market as to how the H2 is looking at. That is how we are giving the guidance.
Saurabh Chawla: We had given the guidance actually in May that the H1 will be looking very soft, and that is because the feedback from the airlines was such, and the H1 from a seasonality perspective is slightly weaker. Our outlook now for the H2 is much stronger. As in every year we have already highlighted, and also the slot demand from the airlines continues to be quite robust. An interesting part is, and that reflects also actually in Delhi Airport performance. Delhi Airport being the hub airport of the country, has a significant part of its as international traffic, and international traffic has grown quite well. We see a much better momentum in the international traffic, with more international airlines, especially European airlines asking for more slots at Delhi Airport. On the F&B side of it, Sir.
[Company Representative] (GMR Airports Limited): Sure. GHL is our vehicle for doing all our F&B businesses. Currently they are in Goa, Hyderabad, Vizag. They were not there in Delhi, so this addition of 50 outlets in Delhi is a significant addition. Anything further which will come up for reconcessioning or a new concession coming up at any of the airports, GHL will definitely look at participating in those bid opportunities, and that is the way forward for GHL.
Achal Kumar: Right. Sir, going back to the first question, can you please also guide about what kind of growth, you mentioned about the more slots demand and all that. So what kind of growth are you envisaging for the H2 versus H1 or maybe the year-on-year?
[Company Representative] (GMR Airports Limited): The H2 we are expecting maybe around 10% growth over the H1. So the overall will be up by about 3% or 4% completely on year basis. So H2 we are seeing a good growth in case of the Goa, Hyderabad, Delhi and little Nagpur and Vizag a little stable. Especially the Delhi and Hyderabad have got a good slot request from the airlines, and Goa is actually going to have better numbers.
Achal Kumar: Okay, perfect. Thank you so much.
Operator: Thank you. The next question is from the line of Biplab Debbarma from Emkay Global. Please go ahead.
Biplab Debbarma: Good morning, everyone. My first question is on the non-aero SPP that we witnessed healthy growth in Q2. Just wondering, what are the reasons attributable to this growth? Is it because DIAL has overtook the operations in duty free last year, or passenger in general have spending more? Do you think this healthy growth in non-aero is sustainable? I am just trying to understand what has happened there.
[Company Representative] (GMR Airports Limited): Yeah. I think as we have been narrating it in the past, our spend growth, we look at anything around 7% to 8% is the minimum spend growth we look at, and that is what gets also reflected in the SPP. What has further added to the growth of about 12% plus now in this period is the full operationalization impact of new Terminal 1 in Delhi. Hyderabad, the expanded terminal, the full impact of that, plus Hyderabad duty free departure store, we got an expanded departure store and which led to increased offerings over there. A combination of these, plus there are few outlets which were not operating earlier in Delhi, those also became operational. It is a combination of what general growth for PC, as I was mentioning, about 7% to 8%, plus these additional areas which got added to our commercial areas.
Biplab Debbarma: So 7% to 8% is our normal that will continue, and whatever one of such events may have contributed to additional 3%, 4% of the year-on-year growth. Is that correct, sir?
[Company Representative] (GMR Airports Limited): Yeah, that is correct. When I say 7% to 8%, it is the spend growth which we talk about. Our non-aero growth, which we have been articulating, is in the range of 15% to 17%. That is what we expect from period to period.
Biplab Debbarma: Okay. Sir, recently you have announced some self-development of hotel in Delhi. Can you give us some more details, some insight, some color?
[Company Representative] (GMR Airports Limited): One moment.
Saurabh Chawla: Yes, DIAL has started development of a hotel project in Aerocity, which is a dual branded hotel, Hilton Hotel and the Waldorf Astoria. The exact size in terms of rooms, et cetera, is still being finalized. The development is scheduled to start in January 2027.
Biplab Debbarma: Okay. One final question. I know based on the slots and seasonality, you have given a healthy guidance, which is very encouraging looking at the current scenario. But sir, we have seen a sharp hike in the airfares, and whenever air fare increases, we assume that it will impact the passenger traffic. People cut down the travel and all. How do you reconcile that despite the significant hike in air fares you expect H2 to be very robust. What is happening there? If you could provide some insight on that will be helpful.
Saurabh Chawla: I think you need to distinguish the air travel between metro air travel and tier 2, tier 3 air travel. Broad numbers of 5% growth, -5% growth includes tier 2, tier 3 also. Our routes are predominantly metro concentrated. So within this environment, if you look at Delhi has done well. Secondly is also we have a good mix of international at our airports. So Delhi has a predominant position in the international side, and those rates on the international side, the demand is very inelastic. People who have to come back to India to meet friends and family, they will not just postpone merely because of tickets prices going up $100, $200. They have pre-planned that months in advance, and they book months in advance to travel to India. Same goes for the tourist tours that come in.
Saurabh Chawla: So based on that itself is how the airlines, they seek slots from us. It is a bottoms-up approach. The airlines see demand, and based on demand, they ask the slots from us, and that is how we guide to the markets. That is the broad way that gives us the confidence to give you that the H2 traffic on a broader plane will be growing at about 10% above the H1.
[Company Representative] (GMR Airports Limited): We have also seen, we also closely monitor the bookings of the slots filed by the airlines. Sometimes they file simply slots and they do not start bookings. But we have seen in case of the Delhi and Hyderabad, all the slot, whatever they have filed, they have already opened the bookings and the ticket bookings are happening for the next 2 to 3 months.
[Company Representative] (GMR Airports Limited): In case of Goa also, more than 90% of the bookings have been opened and bookings are happening. Basing on that, we are expecting.
Biplab Debbarma: Okay. Thank you, sir, and all the best.
Operator: Thank you. The next question is from the line of Anshu from Macquarie. Please go ahead.
[Analyst] (Macquarie): Hi. Good morning, everybody. I had one question on the TDSAT ruling that did come in. What would be the timelines? Although the ruling does specify that AERA is mandated to follow it within 3 months. From an appellate tribunal point of view or from a further challenging point of view, what is the timeline that could be the final decision that we are looking at and the impact in terms of EBITDA? News articles are showing a number of INR 1,500 crores that could come as EBITDA accretion. Does this come in favor at the final settlement? Just wanted to understand the numeric EBITDA flow that could come in from the TDSAT ruling and the timeline of this.
[Company Representative] (GMR Airports Limited): That order in case of the CP4 of the DIAL, it made it very clear to the regulator that whatever orders passed by the TDSAT have to be implemented, which AERA was avoiding it. Now they made it very clear, 3 months time they have given. AERA has already filed an appeal before the Supreme Court. Now this time, AERA, unless they get a stay from the Supreme Court, there is likely that AERA has to implement it. That is what our guess, and they are going for appeal, there is no doubt about it. AERA is going for appeal. But TDSAT judgments which have already come, whatever has been already been filed before the Supreme Court, then if the Supreme Court doesn't give the stay, then they will implement it. So we are expecting, we will just wait and see for next 3 to 4 months.
[Company Representative] (GMR Airports Limited): If they are not able to get the stay, then we will insist on the implementation.
Saurabh Chawla: Most likely it will be the next fiscal year.
[Company Representative] (GMR Airports Limited): Next fiscal year. Financial year.
[Analyst] (Macquarie): And sir, the quantum of benefit that could come to the EBITDA from this?
Saurabh Chawla: No, we would not like to highlight our estimates on the EBITDA. Matter is still sub judice, and I think let the discussions take place in the court. We will of course make our claims based on our calculations. But at this stage, we would not like to hazard or guide the markets as to what our claims would be.
[Analyst] (Macquarie): All right. Lastly, on the hypothetical RAB, what would the progress on that situation and case be for us as we speak right now?
[Company Representative] (GMR Airports Limited): The hearings have happened before the Supreme Court, and I think we are expecting the next 3 months to reach the finality.
[Analyst] (Macquarie): Three months. Okay. Thank you so much.
Operator: Thank you. The next question is from the line of Aditya Mongia from Kotak Securities. Please go ahead.
Aditya Mongia: Yeah. Thank you for the opportunity, and congratulations on the strong set of numbers that the company has reported. A few questions from my side. Firstly, I wanted to check whether any amount out of the INR 2,500 crores that was given to GMR Power has it come back because there is some mention about INR 200 crores inside the cash flow statement.
[Company Representative] (GMR Airports Limited): We have already received INR 200 crore during the financial year, and especially they paid the money to Hyderabad Airport, which has lent INR 200 crores. The money has already been paid. The balance we are expecting to receive by March.
Aditya Mongia: Yeah. So there is a
[Company Representative] (GMR Airports Limited): It is only 30% of INR 2,400. That is about INR 720 crores is only payable during the year. Out of that, INR 200 crores has already been received. Only INR 520 crore rupees is to be received, which we are expecting by March.
Saurabh Chawla: Aditya, there was a payment plan, which is an annual-based payment plan, and the power entity is paying as per that plan. This was what was agreed at that time of demerger of the erstwhile GMR Infrastructure Limited. It is as per that plan. This year, the balance payment is about INR 500 crores. We have still another 2 and a half years to go for the balance payments to come in.
Aditya Mongia: Understood. The second question that I had was more on the non-aero per pax number. It seems that the top 3 airports saw the number grow Q1 to Q4 quite handsomely, but the same was not reflected in GAL's standalone numbers. My sense was that these 2 numbers should have been broadly related because GAL earns from these 3 assets. If you could give us a sense of why the divergence is happening.
[Company Representative] (GMR Airports Limited): Yeah. Aditya, the first point, I think you are right. The SPP and IPP growth has been healthy. That reflects the spend per pax and income per pax. Its translation into the non-aero absolute revenue number is dependent on the traffic. As you would have seen, Hyderabad's traffic has been negative in this period, hence you could not see the full reflection of that into the revenues which are coming as part of GAL. When it comes to the spend, what is reflecting in the airport is also reflecting as part of our non-aero businesses at GAL level.
Aditya Mongia: Yeah. Your top three airports, non-aero per pax, I am talking per pax, have grown maybe 16% to 20%. 15% QoQ. It seems as if your non-aero pax or standalone GAL's declined QoQ, or let us say, just grown single digit at best.
[Company Representative] (GMR Airports Limited): No. If you have seen, I think it is the IPP at a global GAL level, we have talked about a 12% growth in IPP, which is about INR 772 is what we have indicated, and which is a healthy growth of 12%. I do not know which number you are referring to.
Aditya Mongia: Standalone. GAL standalone. Not GAL.
[Company Representative] (GMR Airports Limited): He is talking about the P&L. Aditya Mongia, as for GAL standalone, we are operating the duty-free cargo, car park, and the retail. You understand? Whereas when you look at the income per passenger at the airport level, in addition to these four verticals, they have some other verticals also, they are non-aeronautical. So they take the entire revenue, what they are getting non-aeronautical, divide the passenger income per passenger is at the airport level. When it comes to GAL, there are only four verticals. So you are talking about the income per passenger at airport level is different from our income at GAL level.
Aditya Mongia: Understood. Just the growth trends were very different, so that is why I was kind of thinking.
[Company Representative] (GMR Airports Limited): You are understood now.
Aditya Mongia: That point part.
[Company Representative] (GMR Airports Limited): Yeah. Very simply put, if you see there is a degrowth at Hyderabad Airport, right? From a passenger throughput perspective. That has an impact on your GAL standalone P&L. While the IPP has gone up, but because the throughput is lower, automatically that will have some downward.
[Company Representative] (GMR Airports Limited): That's revenue growth.
[Company Representative] (GMR Airports Limited): Revenue growth will have a downward impact there.
Aditya Mongia: Just a couple of more questions over here. Firstly, the cash position at a console level has seen a meaningful boost, about INR 4,000 crore. It's now almost INR 9,000 crore. Just checking, what is the endgame over here? Will it eventually lead to debt levels coming down or will the company be using this cash for whatever purposes they think appropriate?
[Company Representative] (GMR Airports Limited): Aditya, I think one off item is INR 3,500 crore DIAL has raised on 29 September, whereas the entire amount has been used for repayment of $522 million on 26 October. That is why there is a cash boost about INR 4,000 crore in the cash. Otherwise, our total cash will be around INR 4,500 to INR 5,000 crore only.
Aditya Mongia: Understood. No, I think those are my questions. Thank you for responses here.
Operator: Thank you. The next question is from the line of Karthik Chellappa from Indus Capital Advisors, Hong Kong Limited. Please go ahead.
Karthik Chellappa: Yeah. Thank you for the opportunity, sir. Three questions from my side. The first is, if I were to take your consolidated EBITDA and deduct, let us say, the EBITDA attributable to Delhi, Hyderabad, and Goa, that has seen a sharper decline than, let us say, the EBITDA of the individual airports. Now, you did mention that the Bhogapuram loss this quarter was about INR 820 million. Apart from that, are there any other adjustments which has impacted the EBITDA outside of the three airports?
[Company Representative] (GMR Airports Limited): No, nothing. No.
Karthik Chellappa: Sorry, sir. That is the main adjustment, is it?
[Company Representative] (GMR Airports Limited): Yeah. That is the main. Partly, of course, there will be little downward because of Goa also. But main is Vizag.
Karthik Chellappa: Vizag. Okay. Excellent. Sir, on the gross debt figure, the QoQ increase of about INR 3,900 crore, which SPV would it be attributable to?
[Company Representative] (GMR Airports Limited): This is what we have explained. INR 3,500 crore DIAL has raised on 29 September, whereas that amount has been used only on 26 October for repayment of $522 million bond. There was a gap of 25 days. That is why the debt is showing more as on 30 September, but by 31 October it is fully paid. Under Indian regulations, you have to keep cash before you pay off the debt. Do not ask me the merit of it, but that is the negative carry I have on my books over a period of 20 days. 25 days we have negative carried.
Karthik Chellappa: Okay, great. Last question, sir, is if I look at the non-aero revenue at both Delhi and Hyderabad, and if I were to distill it further into duty-free and F&B alone on a year-on-year basis, which drove a larger part of the growth? Was it increasing penetration within passengers, or was it the increased spend per passenger in F&B and duty-free specifically?
[Company Representative] (GMR Airports Limited): I think when we talk about the spend takes into consideration the penetration, any business we talk about. Coming back to your question, which has been the major contributor to the growth? The growth in F&B business in terms of spend has been higher than the growth what we have seen in case of, say, duty-free in Delhi, whereas duty-free in Hyderabad, the growth has been good double digit numbers. Overall, what you have seen in terms of non-aero revenue growth is a combination of growth coming in from all the segments. But in comparative terms, the hospitality, including F&B, has been a higher growth than the growth we have seen in duty-free.
Karthik Chellappa: Got it. If I just heard it correctly, in Delhi, F&B grew faster than duty-free, whereas in Hyderabad, duty-free grew faster than F&B. Is that understanding correct? Okay, got it. Okay, that is all from my side. Wish the team all the very best for the rest of the year. Thank you very much.
Operator: Thank you. Thank you, sir. We will take the next question from the line of Qasidat Chunavat from Citicorp Securities. Please go ahead.
Kaseedit Choonnawat: Hi, good morning. Thank you for your time.
Operator: I am sorry, sir, your voice is breaking. Mr. Chunavat, your voice is breaking, so I will request you to kindly use your
Kaseedit Choonnawat: Hi, can you hear me?
Operator: Yes, I can hear you. Please proceed.
Kaseedit Choonnawat: Thank you. Three housekeeping questions. Number one, just to recap the loss of Bhogapuram this quarter is INR 850 million. What is the profit and loss of Nagpur this quarter, please? That is question one. Question two on depreciation and amortization, given that the two new airports have entered operation, what will be the run rate from now? Would, let us say, the current INR 4.9 billion be a good run rate or are we climbing into, let us say, low five? The last question is on minority. I have noticed an uptick from INR 570 million last quarter to INR 800 million this quarter. What is the key driver, please? Thank you.
[Company Representative] (GMR Airports Limited): As far as Nagpur is concerned, it has shown a profit of INR 80 million for the second quarter. The run rate of depreciation expected in case of the Vizag Airport, that is called Bhogapuram, will be in the range of about INR 240 million per annum, which is about INR 22.4 crore approximately.
Kaseedit Choonnawat: Thank you. Lastly, on minority increases QoQ, please.
[Company Representative] (GMR Airports Limited): INR 240 crore. It is INR 240 crore, sorry. It is not 24, INR 240 crore.
[Company Representative] (GMR Airports Limited): This is based on the ad hoc tariff right now.
[Company Representative] (GMR Airports Limited): Depreciation is different, but from a loss perspective, it is still based on the ad hoc tariff.
[Company Representative] (GMR Airports Limited): That is correct.
Kaseedit Choonnawat: Thank you. Last question on the QoQ increases in minority. Thank you.
[Company Representative] (GMR Airports Limited): The reason for minority is that there is a profit in DIAL and GAL, so that is why the minority is increased. For all other entities, GAL is holding the 100% shareholding, so that is why that loss is coming into the GAL account.
Kaseedit Choonnawat: Very clear. Thank you. Just to recap on the number, you mentioned that Nagpur loss is INR 18 crore, right? Is that correct?
[Company Representative] (GMR Airports Limited): No, Nagpur is in profits. INR 80 million is for the Q2 profit.
Kaseedit Choonnawat: INR 181.8 million profit at Nagpur this year.
[Company Representative] (GMR Airports Limited): INR 80 million.
Kaseedit Choonnawat: Thank you. That is very clear. Thanks.
Operator: Thank you. We will take the next question from the line of Achal Kumar from HSBC. Please go ahead.
Achal Kumar: Yeah, thanks for taking follow-up question. Just a clarity. You mentioned that your F&B business GHL will grow wherever there is an opportunity. I understand that Kolkata and Chennai F&B concessions are coming up for renewal. Do you think GHL would bid for the airports outside GMR, or is it going to stick to GMR? What is your strategy on that?
[Company Representative] (GMR Airports Limited): At this stage, we have been focusing only on our airports. Maybe as part of our extended strategy, we will start looking at opportunities outside of own airport, but not at this stage.
Achal Kumar: Okay, perfect. Thank you so much.
Saurabh Chawla: But just to further emphasize on that, the strategy is to first acquire the GMR Airport businesses, stabilize and grow those businesses. And of course, we call this as a platform play. It allows us to go and bid for other airports also, and which we will do. We have demonstrated in the past in duty free. There is no reason why we will not be demonstrating the same thing in the businesses of cargo and F&B and other non-aero businesses. So we are creating that as a consumer platform. Just want to highlight one aspect that it is not showing results. And if you look at the revenue of the platform is almost equivalent to Hyderabad. And EBITDAs are also in a similar range.
Saurabh Chawla: So we are in the process of transitioning from purely a utility company to a utility and a consumer company. And I can assure you that in the next three to four years, once we start significant development on the real estate side and start monetizing the real estate portions into a REIT or selling those commercial assets to the pension funds or sovereign funds who like yield, you will see a bigger bump up happening on the real estate side also. So that is the strategy to convert a pure utility company into a utility and consumer, and now from utility consumer into a utility and real estate. That is the whole journey of GMR. We are not a pure utility company.
Achal Kumar: Perfect. Thank you.
Operator: Thank you. The next question is from the line of Prateek Kumar from Jefferies. Please go ahead.
Prateek Kumar: Hello, yeah. Thanks for taking question again. I have one question on CapEx. In H1, we have incurred INR 1,600 crore CapEx. We were expecting INR 2,000 to INR 2,500 crore CapEx for FY27. How are we looking at that number now?
[Company Representative] (GMR Airports Limited): The CapEx which we have incurred is basically the Bhogapuram capitalization, is one aspect. The other aspect is operational CapEx. In case going forward, there is no airport CapEx we are incurring any expansion. It is only operational CapEx, which could be in the range of INR 1,000 to INR 1,500 crore across all the airports together.
Prateek Kumar: We are raising CapEx guidance for this year to INR 3,000 crore now from
Saurabh Chawla: No.
Prateek Kumar: INR 2,000 to
[Company Representative] (GMR Airports Limited): What we said is that Bhogapuram CapEx is completed now. There is no more additional CapEx for any airport expansions. What we have said is that there will be a CapEx, only operational CapEx, which we incur all the airports together between INR 1,000 to INR 1,500 crore per annum. No more expansion CapEx, no more new airport CapEx.
Prateek Kumar: What is the CapEx guidance for FY27?
[Company Representative] (GMR Airports Limited): FY27-
Prateek Kumar: INR 1,300 crore.
[Company Representative] (GMR Airports Limited): The balance period will be in the range of about INR 1,000 crore.
Prateek Kumar: Sure. That was my only question. Thank you.
Saurabh Chawla: Thank you.
Operator: Thank you. The next question is from the line of Biplab Debbarma from Emkay Global. Please go ahead.
Biplab Debbarma: Thank you. Just one small question. I think I missed it. Why there is a significant degrowth in passenger traffic in Hyderabad?
Saurabh Chawla: Primarily, it is because of two reasons. One is the route rationalization by IndiGo, which they started in January 2026. It has now been fully rationalized, and now we see growth started to come back in that part of the world. The second aspect also, the initial degrowth was also because of the impact of geopolitical events in the Middle East. Hyderabad on its international traffic was more skewed towards the Middle East, and that had an impact on Hyderabad. The international side has recovered completely. We should start seeing better growth on the international side in Hyderabad in the H2. There are also more connectivity to Europe from Hyderabad, so we should see better traction on the international side.
Saurabh Chawla: However, on the domestic side, on the route rationalization by IndiGo, that will have some remaining effect from the H1 continuing in the H2, which we believe that next year, that should also be behind us.
Biplab Debbarma: Okay. Thank you, sir.
Operator: Thank you. The next question is from the line of Samay Sabnis from Helios Capital. Please go ahead.
Samay Sabnis: Yeah, thanks for the opportunity. I just have one question from my side. This Delhi Car Park used to be operated from a 100% subsidiary, and now the stake in that subsidiary has been reduced to 50.1%. Could you just give the reasons for that?
[Company Representative] (GMR Airports Limited): Delhi Car Park company, 49% is held by DIAL and 51% is held by GAL. So it is a subsidiary of GAL with 51%, but holding 100% through DIAL.
Samay Sabnis: Right. But if I am right, I mean, the previous quarter, your stake was 100% in this subsidiary, right? Not 50.1.
[Company Representative] (GMR Airports Limited): No, this is the same, 50.1 held by the GAL, 49.9 held by the DIAL. This is a standard. It is always there, but at GAL level it will become automatically 100% because through DIAL, I am holding the 49.9. So from a GMR Group perspective, it is 100% holding. The 100% holding is broken into GAL 51% and Delhi Airport 49%.
Samay Sabnis: Simple. Okay. Yeah. Thank you.
Operator: Thank you. The next question is from the line of Aditya Mongia from Kotak Securities. Please go ahead.
Aditya Mongia: Hey, thanks for the opportunity again. Just a first question on somewhat of a comparison of non-aero pax at a portfolio level between yourselves and your key peers. There is still a difference of about INR 300 or so, you being at about 770. I understand some aspects are obviously specific to companies and cannot be replicated, but are there things that you think can be implemented? Let's say, the app that the peer uses is giving quite good gain. Just your sense on what additional can be done by GMR to prop up the numbers from INR 770 to higher levels of, let's say, 1,000.
[Company Representative] (GMR Airports Limited): Aditya, I think first of all, our competitors, their numbers, we will not be able to comment on that, how they are working it out, and what are the basic basis for that. We can talk about our numbers. As you would have seen, a very healthy growth in our non-aero SPP on a global basis, I am saying, which is like 772 we are talking about for this period.
[Company Representative] (GMR Airports Limited): Coming to your question on what all we are doing, yes, the digital market space is definitely an area. We have our own app, which is in fact, is now seeing attraction. So we have taken some targets for us to how much of digital sales has to come from that app. So we are taking steps on that. We have expanded our own duty-free area. We are looking at how do we redo some of the spaces available in T3.
[Company Representative] (GMR Airports Limited): All that is going to be part of our exponential non-aero IPP or income growth, what we are looking at. I can only tell you more at this stage, this is what we are looking at. But comparison with the peer, we will not be able to say anything at this stage.
Aditya Mongia: I completely take that point. Just also on this aspect, wanted to get a sense of, if we can think through what is the salience inside 770 odd YPP of consumers that are not passengers, but are visitors to the airport. Is that a number that you track, and is it starting to become meaningful? Where can it land up over time?
[Company Representative] (GMR Airports Limited): Yeah. Aditya, what you are saying is the right strategy. When we talk about this spend, it has got two components. One is the penetration, and second is the ATV, or what we call the Average Ticket Value. Our strategy of growing non-aero revenue is also focusing on penetration. And that is what will lead to the kind of growth we are targeting. When we say 15% to 17% of our non-aero revenue growth is also hinging on that penetration strategy.
Aditya Mongia: Okay. I was just trying to get also a sense that consumers who are not passengers, but visitors, let's say those who have come to receive, is that inside your YPP number starting to become material or not?
[Company Representative] (GMR Airports Limited): Yes. As we expand our, what we call it as the curbside area,
Aditya Mongia: Curbside area.
[Company Representative] (GMR Airports Limited): which is for people who are not travelers, but who are also coming to airport either as a meeters and greeters or otherwise. So, as we are expanding our, what we call it as a, what you have seen in Hyderabad as an Aeroplaza, similarly, what we have seen in Goa, similarly, you will see now in Vizag and in Delhi going forward. So yes, definitely, that's also another important constituent of overall non-aero revenue growth.
Aditya Mongia: Understood. For the two assets that have gotten added, Bhogapuram and Vizag, could you also give us the revenue and EBITDA numbers? I think what you're giving is a bottom-line number so far.
Saurabh Chawla: One second, Aditya.
[Company Representative] (GMR Airports Limited): This from airport, the top line is about INR 42 crore for this quarter, with EBITDA negative about INR 4.2 crore, with the loss about INR 82 crore.
Saurabh Chawla: For how many days?
[Company Representative] (GMR Airports Limited): This is for 46 days.
Aditya Mongia: Okay. For Nagpur, the quarterly numbers would be?
[Company Representative] (GMR Airports Limited): Just one minute. I will read the Nagpur. Nagpur, the top line is about ₹42 crore, EBITDA is ₹8.53 crore, and PAT is ₹8.06 crore.
Aditya Mongia: Got that. The net effect on EBITDA was a small positive boost in this quarter.
[Company Representative] (GMR Airports Limited): Yeah. It is a small positive.
Aditya Mongia: Thank you. That was the last question on my side. Thank you.
Operator: Thank you. The next question is from the line of Karthik Chellappa from Indus Capital Advisors, Hong Kong Limited. Please go ahead.
Karthik Chellappa: Yeah. Thank you, sir. Just one clarification. The 100 odd crore increase in other expenses at a consolidated level this quarter, were there any one-offs, and what would explain the INR 100 crore?
[Company Representative] (GMR Airports Limited): These are all mainly Bhogapuram expenditure and the Nagpur expenditure, which are grouped under that head.
Karthik Chellappa: Which means similar amounts should get reflected even in the next quarter, right? This INR 875 to INR 900 crore should be the normal run rate, right?
[Company Representative] (GMR Airports Limited): Yeah, mostly.
Karthik Chellappa: Okay. Thank you, sir. That is all from my side. Thank you.
Operator: Thank you. Ladies and gentlemen, that was the last question for today. I would now like to hand the floor back to Mr. Saurabh Chawla for closing comments. Thank you, and over to you, sir.
Saurabh Chawla: Yeah, thank you. I just wanted to clarify on the EBITDA numbers, the first question that Prateek had.
[Company Representative] (GMR Airports Limited): The first question you should ask is that there is a momentum, there is a growth on the revenue side, but EBITDA is flattish. The reason basically is if you look at Delhi and Hyderabad, the EBITDA has grown. The negative impact is mainly because of Goa and Vizag. That is the reason. During the call, a lot of questions were covered under this head. Just want to make it clear that this is only because of this Vizag, which has been added in this quarter in our portfolio. Delhi, Hyderabad, EBITDA, in fact, you look at margins have also expanded in Q2 this year.
Saurabh Chawla: I think the message is that both Delhi and Hyderabad, despite soft airline traffic, has really shown resilience. Margins have expanded and had the traffic also remained normal as per our expectations, the numbers would have been surely much better, and there would have been much better operating leverage visibility in these 2 airports. The negative impact is only because of now consolidation of Bhogapuram or Vizag and some softness at the operating level at Goa. That is the broad message that I would give. On the non-aero side is something which is doing very well and the debt has capped. On the non-aero side also, the growth momentum, again, we would like to guide that the growth will continue to be around 15% on a secular basis around that number. The EBITDA margins on the non-aero, consolidated non-aero should be around 20-odd percent, I would say.
Saurabh Chawla: That is the business, that how you should look at it. Thank you. Thank you everybody for your participation in the call and thank you for your patience and those who we could not include in the call due to paucity of time, the IR team is available to answer your questions offline through calls or through emails. Thank you everybody. Have a good day.
Operator: Thank you, sir. Thank you members of the management. On behalf of GMR Airports Limited, that concludes this conference. We thank you for joining us and you may now disconnect your lines. Thank you.
