ICICI Securities has maintained its 'HOLD' rating on GMR Airports, adjusting the price target to ₹99. While the company reported a positive turnaround with a quarterly net profit of approximately ₹1.5 billion, the brokerage remains cautious due to muted passenger traffic growth of 1%. Investors should note the company's new fundraising plans and airport expansion projects.
ICICI Securities has updated its outlook on GMR Airports Infrastructure Ltd., maintaining a 'HOLD' rating while raising the price target to ₹99. This adjustment follows the company's recent financial results for the first quarter of fiscal year 2027, which highlighted a notable improvement in profitability despite mixed operational performance.
Financial performance in the first quarter showed a distinct turnaround. GMR Airports reported a consolidated net profit of approximately ₹1.48 billion to ₹1.5 billion, marking a significant recovery from the losses recorded in the same quarter last year. Total consolidated income for the period rose by roughly 23% year-on-year, reaching ₹40.8 billion. This growth was largely supported by strong non-aeronautical income—revenue from sources other than flight operations—and the company's improved pricing power.
However, the brokerage’s cautious stance is linked to the slower pace of growth in passenger traffic. During the quarter, the company handled 30.5 million passengers, representing a modest 1% increase compared to the previous year. This deceleration is being watched closely, as it is influenced by external factors including route rationalization by airlines and broader geopolitical instability that can affect travel demand.
To support its medium-term growth and manage its balance sheet, the company's board has approved a significant capital-raising plan. This includes raising up to ₹5,000 crore via equity-linked securities and an additional ₹1,500 crore through non-convertible bonds, which are primarily aimed at debt refinancing.
Operational expansion continues to be a key focus for the company. GMR Airports took over operations at Nagpur Airport in June 2026 and inaugurated the Bhogapuram International Airport in August 2026. While these assets are expected to drive future revenue, investors will likely focus on the execution of these projects and the pace at which passenger traffic recovers.
The infrastructure sector is highly competitive, and valuation concerns remain a factor in the brokerage's outlook. The success of the company’s expansion strategy will depend on balancing new capital spending with the need to improve passenger volumes and sustain profit margins amid potential macroeconomic challenges. Investors may continue to monitor the upcoming tariff orders for key airports and the progress of the company's fundraising initiatives.