This Chris Wood-owned airport scrip hit a new high today. Guess the stock!

Chris Wood stocks: Shares of GMR Airports Infrastructure hit an over 16-year high of Rs 101.20 as the stock gained 3 per cent on the BSE in Thursday’s intraday trade. In the past two days, the stock has rallied 6 per cent. It is trading at its highest level since January 2008. The stock had hit a record high of Rs 131.81 (adjusted to rights issues, 1:1 stock split) on December 6, 2007.

In the past one year, the market price of GMR Airports has more-than-doubled, zooming 136 per cent, as compared to a 24.5-per cent rise in the BSE Sensex. It has bounced 43 per cent from June 4 low of Rs 70.63 on the BSE.

Christopher Wood, global head of equity strategy at Jefferies added GMR Airports in his kitty earlier this month by trimming stakes in two private sector lenders.

"An investment in GMR Airports Infrastructure will be introduced in the India long-only portfolio with a 4 per cent weighting. This will be paid for by reducing the investments in ICICI Bank and HDFC Bank by one percentage point each and by shaving the investment in Axis Bank by two percentage points," Wood wrote in his weekly note to investors, GREED & fear in early June.

GMR Airports is the largest private airport operator in Asia and the second largest in the world with a passenger handling capacity of over 189 million annually. GMR Airports, a subsidiary of GMR Airports Infrastructure (formerly known as GMR Infrastructure) has Groupe ADP as its strategic partner, which is holding a 49 per cent stake.

On June 12, GMR Airports informed the exchanges that the National Company Law Tribunal, Chandigarh Bench has approved the merger of GMR Airports and GMR Infra Developers into GMR Airports Infrastructure.

The merger has an objective to enhance shareholder value by simplifying the corporate structure and bringing public shareholders closer to the airport assets.

"Key rationale for the merger is to strengthen the strategic relationship with 'Groupe ADP' by bringing them at the listed company level. Simplified corporate holding structure, in-line with global best practices, will result in greater financial efficiencies - improving the mechanism for upstreaming of free cash flows and optimisation of cost by elimination of additional corporate layers. The new GIL is a more agile development platform to capture new opportunities in India and South-East Asia," according to Jefferies.

Meanwhile, since December 8, 2023, the stock price of the company has surged 64 per cent after GQG Partners (4.7 per cent stake), Nomura India Investment Fund Mother Fund (1 per cent stake), and Stichting APG Emerging Markets (0.6 per cent stake) and other collectively acquired 7.66 per cent stake in GMR Airports Infrastructure via open market through bulk deals. These investors had purchased these shares at an average price of Rs 58.61 per share. CLICK HERE FOR FULL DETAILS

https://www.bseindia.com/xml-data/corpfiling/AttachHis/3CC29F33_DDCF_40FB_824B_A08D573A724C_104413.pdf

GMR Airports is currently developing two significant greenfield airport projects — one in Bhogapuram, Andhra Pradesh, and the other in Heraklion, Crete, Greece, in collaboration with construction company GEK Terna.

Within India, GMR Group manages operations at three airports: Delhi, Hyderabad, and Mopa (Goa's second airport). Additionally, the group operates two international airports abroad: Cebu in the Philippines, and Medan in Indonesia.

Domestically, GMR is actively pursuing opportunities for new airports as and when they arise. As per the national monetisation plan, the Government is planning to privatise 25 airports in four phases. The company’s immediate aim is the next round of regional airports privatisation. Outside India, the Group is strategically focused on promising geographies of South Asia, South East Asia, Middle East, Africa, Central Asia and Eastern Europe.

For the financial year 2023-24 (FY24), GMR Airports reported a solid operational performance with consolidated earnings before interest, taxes, depreciation & amortization (Ebitda) up 48.55 per cent year-on-year (Y-o-Y) to Rs 3,418 crore; and margins improving 700 bps to 50 per cent in FY24 from 43 per cent in FY23. Revenue grew 31 per cent to Rs 8,754.6 crore from Rs 6,673.80 crore in the year-ago period.

Analysts at Jefferies expect profit after tax to be positive in FY26 and leverage ratios to moderate (Net Debt/Ebitda to 4-5x FY26 vs 10-12x FY23/FY24), as large capex related to DIAL/GHIAL is behind.

"ADP's presence at strategic & board level will ensure fund-raising capabilities, project execution and bidding capabilities," the brokerage firm said as it initiated coverage on the stock on May 26, 2024 with a target price of Rs 100 per share. It expects GMR’s Ebitda CAGR of 32 per cent over FY24-FY27e.

In the upside scenario, the brokerage firm expects Airport traffic to grow at CAGR of 15 per cent over FY24-FY27 and higher increase in Aero tariffs. Analysts expect Ebitda to grow by 40 per cent CAGR over FY24-FY27. It values the stock on a SOTP basis at Rs 120/share.