GMRAIRPORT Q2 FY27 Earnings Call: Net Debt Peaks at Rs. 340 Bn, H2 Traffic Guided 10% Above H1

GMRAIRPORT held its Q2 FY27 earnings call on October 28, 2026. Here's a quick read of what management said — performance, strategy, and the outlook ahead.

Fifth Straight PAT-Positive Quarter, But EBITDA Lags Revenue

• Total income Rs.41.9 bn (+12% YoY) — Q2 FY 2026-2027 consolidated; EBITDA Rs.15.7 bn (+2% YoY) and PAT Rs.654 mn vs Rs.351 mn in Q2 FY 2025-2026, the fifth consecutive quarter of positive reported PAT.
• Revenue-EBITDA divergence — management attributed the flattish EBITDA to lower traffic (aero revenue down, expenses unchanged), operating softness at Goa, and consolidation of Bhogapuram (Vizag) added during Q2 FY 2026-2027; excluding Vizag, EBITDA growth would have been "pretty decent."
• Net debt peaked at Rs.340 bn (excluding Rs.29.1 bn deep-in-money FCCBs), flat QoQ; management stated net debt has peaked with completion of Vizag (Bhogapuram) Airport and maintained its outlook for free cash generation at the two largest airports and the listed entity in the medium term.
• Interest expense up ~6-7% QoQ despite flat debt, driven by Vizag interest hitting the P&L after capitalization ended when operations began 17 August 2026; Q3 FY 2026-2027 will reflect the full Vizag interest, stabilizing thereafter.
• Cash rose ~Rs.4,000 crore to almost Rs.9,000 crore because Rs.3,500 crore raised on 29 September 2026 was fully used to repay $522 million on 26 October 2026; otherwise total cash would be around Rs.4,500-5,000 crore.
• Minority interest rose from Rs.570 mn (Q1 FY 2026-2027) to Rs.800 mn (Q2 FY 2026-2027) — Saurabh Chawla attributed this to profits at Dal and Ghal; GAL holds 100% in all other entities, whose losses flow into the GAL account.

Soft H1, Seasonally Stronger H2 Guided on Slot Demand

• GAL traffic up 1% YoY to 28 mn passengers in Q2 FY 2026-2027 (excludes Cebu; includes Nagpur and Vizag from operationalization); H1 FY 2026-2027 traffic 58.4 mn (+1% YoY) versus a 3% decline for India as a whole.
• H2 FY 2026-2027 traffic guided ~10% above H1, with full-year FY 2026-2027 traffic up ~3-4% YoY, led by Delhi, Hyderabad and Goa, modestly by Nagpur, with Vizag stable — based on seasonality and robust airline slot demand filed well in advance.
• Hyderabad recovery drivers — Indigo's route rationalization (begun January 2026, FY 2025-2026) is now fully rationalized, and Middle East geopolitical impacts on international traffic have faded; international traffic has recovered completely with better growth expected in H2 FY 2026-2027 on increased Europe connectivity.
• Domestic drag timeline — the residual effect of Indigo's route rationalization continues into H2 FY 2026-2027; management believes this drag should be behind the company by FY 2027-2028.
• Slot bookings underpin the outlook — for Delhi and Hyderabad all filed slots have opened bookings for the next 2-3 months; in Goa more than 90% of bookings have been opened.
• Fuel-price and fare-hike risk flagged by Achal Kumar (HSBC) — management distinguished metro vs tier 2/3 travel, noting GMR's routes are predominantly metro-concentrated and international demand is inelastic despite $100-200 ticket price increases.

Delhi Parking Yield Overshoot, TDSAT Win, AERA Tariff Actions

• Delhi aero YPP above 440 vs the regulator's 365 — driven by new dynamic parking pricing (fixed for the first 4 hours, doubling every 4 hours to 5x at 24 hours); the elevated run rate may persist for about another year (into FY 2027-2028) and the excess will count as over-recovery for the next control period.
• TDSAT directed AERA to implement its DIAL CP4 rulings within 3 months; AERA has filed an appeal before the Supreme Court — management will watch the next 3-4 months (~Q4 FY 2026-2027) and will insist on implementation if no stay is granted; Saurabh Chawla indicated the EBITDA benefit is most likely to flow in FY 2027-2028.
• Quantum not guided — on the analyst-cited ~Rs.1,500 crore potential EBITDA impact from news articles, management declined to quantify, stating the matter is sub judice.
• AERA issued Hyderabad's fourth control period tariff — weighted average YPP of Rs.538 over the five-year period assuming no expansion capex, rising to Rs.640 including expansion capex; AERA also issued a consultation paper for Vizag Airport's first control period tariff.
• Vizag on ad hoc tariff — full tariffs expected by January 2027 (Q4 FY 2026-2027), after which losses will taper down; Q3 FY 2026-2027 may likely see a similar loss.
• Ratings upgrades across the board — S&P upgraded Delhi Airport senior secured notes to BB+; S&P and Fitch upgraded Hyderabad to BBB-; GAL upgraded to AA- by CRISIL and CARE. Delhi Airport raised Rs.35 bn via 15-year NCDs at 8.7% to refinance $522 mn notes at 10.9% effective cost; GAL raised Rs.15 bn NCDs at 9.56% to refinance debt at 10.75%.

IPP at Rs.772, 15-17% Growth Ambition, F&B Win at Delhi T3

• Non-aero IPP of Rs.772 in Q2 FY 2026-2027 (GAL level, +12% YoY), above the baseline spend growth assumption of 7-8%; the incremental ~3-4% came from full operationalization of Delhi's new Terminal 1, Hyderabad's expanded terminal and duty-free departure store, and previously non-operational Delhi outlets now running.
• 15-17% non-aero growth reiterated (period unspecified) — management's strategy rests on two levers, penetration and average ticket value, with the targeted growth hinging on the penetration push; consolidated non-aero EBITDA margins guided above ~20% (period unspecified).
• GMR Hospitality (70% subsidiary) won the F&B concession at Delhi Terminal 3 (previously a JV with GAL at 40% stake); consolidation reflects from Q3 FY 2026-2027; the addition of 50 outlets in Delhi was called a significant addition. GHL is currently focused only on GMR's own airports and may look outside "not at this stage."
• Platform play framing — Saurabh Chawla said the consumer platform's revenue is almost equivalent to Hyderabad airport's with EBITDA in a similar range, transitioning the company from a pure utility to a utility + consumer company; the duty-free playbook will be replicated in cargo, F&B and other non-aero businesses.
• Meeters-and-greeters spend emerging — the curbside/Aero Plaza format is live at Hyderabad and Goa, with Vizag and Delhi to follow.
• Peer gap flagged, not addressed — an analyst noted a ~Rs.300 per-passenger gap to a peer on Q2 FY 2026-2027 levels; management declined competitor comparisons, citing its own app traction, expanded duty-free area, and evaluation of redeveloping T3I spaces.

Bhogapuram Capex Complete; Growth Capex Era Ends

• H1 FY 2026-2027 capex of Rs.1,600 crore (Bhogapuram capitalization plus operational capex); management rejected raising FY 2026-2027 guidance from the prior Rs.2,000-2,500 crore to Rs.3,000 crore; H2 FY 2026-2027 capex expected at about Rs.1,000 crore.
• Bhogapuram capex is completed — "no more expansion capex, no more new airport capex"; going forward only operational capex across all airports combined, indicated at Rs.1,000-1,500 crore per annum (period unspecified).
• Vizag (Bhogapuram) loss of ~Rs.82 crore in Q2 FY 2026-2027 on 46 days of operations, revenue ~Rs.42 crore and EBITDA ~-Rs.4.2 crore, attributed to the ad hoc tariff; depreciation run rate expected at ~Rs.240 crore per annum (period unspecified).
• Nagpur posted PAT of ~Rs.8 crore (Rs.80 million, re-confirmed after an analyst misheard) on revenue ~Rs.42 crore and EBITDA Rs.8.53 crore; the combined net EBITDA impact of the two new assets for the quarter was a small positive.
• Other expenses rose ~Rs.100 crore QoQ, attributed mainly to Vizag and Nagpur expenditure with no one-offs; the Rs.875-900 crore quarterly run rate should largely continue into Q3 FY 2026-2027.
• Delhi Car Park ownership clarified — after an analyst flagged the stake appearing to fall from 100% to 50.1%, management confirmed no change: GAL holds 50.1% (51%) and DIAL 49.9% (49%), a structure "always there"; at the GAL consolidated level it is 100% because DIAL's stake is itself held through GAL.

Monetization Pipeline Builds; Debt Peak Behind

• Real estate bump-up expected in the next 3 to 4 years — management expects a bigger uplift contingent on significant real estate development progressing, with monetization planned via a REIT or sale of commercial assets to pension funds/sovereign funds seeking yield ("We are not a pure utility company").
• DIAL's first self-development commercial building at Delhi Aerocity hands over in FY 2026-2027 with indicative rentals above Rs.250/sq ft/month (one tenant signing at ~Rs.270); on the 1 million sq ft development, completion is slated for end of Q4 FY 2026-2027 with leasing expected to complete within 6-9 months into FY 2027-2028.
• Hotel pipeline — Taj Delhi International (380 keys) partial operations from Q4 FY 2026-2027; a ~500-key Hilton/Waldorf Astoria dual-branded Aerocity development scheduled to start January 2027 (within FY 2026-2027); a ~150-key Vivanta hotel at Vizag Bhogapuram to be handed over in phases within FY 2026-2027.
• Cargo momentum — record H1 FY 2026-2027 cargo throughput at Delhi and Hyderabad; GMR Cargo and Logistics signed a licensing agreement with FedEx for the express cargo terminal at Cargo City (Delhi); Hyderabad Airport signed an MOU with Brussels Airport to strengthen Hyderabad-Europe air cargo connectivity.
• Promoter equity — GAL issued 102 million equity shares to the Group ADP subsidiary on conversion of 2.5 million OCRPS (1:40 ratio per merger scheme); ADP sold 3.4% equity to the GMR family and is converting OCRPS to equity to maintain the 51:49 promoter ratio; fully diluted equity unchanged.
• Outlook intact despite short-term softness — management's conviction in the long-term outlook for Indian aviation remains unchanged on structural drivers: fleet expansion, international network development, rising mobility demand, and India as a global aviation hub.