Financial profile of DIAL, GHIAL improves, says CARE Ratings

Citing improved financials of entities running Delhi and Hyderabad airports, CARE Ratings has revised the rating on GMR Airports Ltd's bank facilities.
GAL is the holding company of GMR Group's investments in the airport sector. GMR Infrastructure Ltd holds over 97 per cent stake in GAL as on March 31.
The agency said the rating continues to factor in the strength from the monopolistic position of its airport assets, strong operational performance and healthy profitability and cash accruals of its largest asset -- Delhi International Airport Pvt Ltd (DIAL).
"The revision in the rating of GAL factors in significant improvement in the financial and operational profile of its two major operating assets -- DIAL and GMR Hyderabad International Airport Ltd (GHIAL) during FY15," it said in a report.

Rating on GAL's long-term bank facilities worth Rs 500 crore has been revised to 'CARE A' from 'CARE A-'.
However, CARE said the rating is constrained by susceptibility of airport's revenues to seasonality and volatility associated with traffic growth, weak credit profile of the airlines and regulatory risk faced by its airport assets.
"Going forward, the impact of New Aeronautical Tariff for the second regulatory period (FY15-FY19) for DIAL, fructification of traffic growth amid challenging economic environment and nature and extent of any new investments in addition to the ones already envisaged would remain the key rating sensitivities," the report said.