GMR Airports Infra

This ‘airport’ infra company continues to remain in the red. In Q2FY13, its consolidated net loss stands at Rs.180 crore as against Rs.110 crore in Q1FY13 and Rs.63 crore net loss in Q2FY12. Its net loss for H1Fy13 stands at Rs.274 crore. As expected, the company has blamed it all on the high interest outgo which at the end of Q2Fy13 stood at Rs.485 crore and for H1Fy13, it is at Rs.965 crore. The company has huge infra projects on hand and currently seems financially, fully leveraged. Its current debt is around Rs.39,000 crore. It is sitting on an enabling provision to raise around Rs.2,500 crore from the market to partly pay off the debt, but the market conditions have been non conducive and the company is still to use that option. But given the current loss, that too might become difficult for some time now.

In current Q2, in terms of revenue, airports did well with an EBIT of 15%, almost same as in Q1FY13 and much better than 8% of Q2FY12. Power sector had a loss and roads did better sequentially with an EBIT at 54% v/s 50%. EPC which is a miniscule part of its business now, EBIT more than halved from 8% (QoQ) to 3.2%. Recently, the civil aviation ministry ordered abolition of airport development fee at Mumbai and Delhi airports, effective Jan 2013. GMR has also been directed to infuse equity into the Delhi airport  and if the proposal indeed goes through, it will have to bring in Rs.2100 crore. This means further leveraging for the company and that currently, does not bode too well. Its airport project at Male continues to hand on fire as it ran into rough weather after the regime change with the opposition challenging the privatisation process and threatening to re-nationalise the airport if it comes to power. Thus for now, rough weather seems to dog this company and Q3 could remain equally stormy. Interest rates coming down could help save some money but overall, it first needs to reduce its debt.