Stock to buy: Elara says GMR Airports' earnings turn structurally strong

Elara Capital has retained its 'Buy' call on GMR Airports with a target price of ₹140

Stock to buy: Brokerage firm Elara Capital is bullish on GMR Airports after the third quarter (Q3FY26) earnings. It said that Q3 marked a structural earnings inflection for the company.  GMR Airport shares surged 1.4 per cent to trade at ₹101.18 on the National Stock Exchange (NSE) in early morning deals on Wednesday.    The brokerage has retained its 'Buy' call on GMR Airports with a target price of ₹140, implying an upside of 40 per cent from Tuesday's closing of ₹99.89.  CHECK Stock Market LIVE Updates 

'Strong margin expansion'

The brokerage said that tariff-led aero yield expansion at Delhi and steady scaling of non-aero adjacency businesses resulted in strong margin expansion leading to strong adjusted earnings beat.  With Bhogapuram (in Vizianagaram district of Andhra Pradesh) nearing commissioning and major capex behind, leverage is likely to peak in FY26 and net/EBITDA set to moderate from FY27 as EBITDA scales up.  It said that sustained aero realisation, improving non-aero monetisation, and disciplined capital allocation are likely to support cash generation and balance sheet deleveraging in the medium term.  Elara has raised its earnings of 2 per cent for FY26E, 3 per cent for FY27E and 4 per cent for FY28E. 

GMR Airports Q3 result 

In Q3FY26, GMR Airports' consolidated profit after tax (PAT) declined by 14 per cent to ₹173.96 crore,  The profit was impacted mainly due to one-time expenses, including those related to the new labour code. The company had earned a profit of ₹202.10 crore in the corresponding quarter of the last fiscal.  The company's total income surged to ₹4,082.77 crore in Q3 from ₹2,748.22 crore in a year-ago period. 

DIAL swings to black

Delhi International Airport Ltd (DIAL), which operates the Delhi airport, returned to black in the quarter with a profit of ₹231 crore. DIAL is the consortium led by the GMR Group.  GMR Airports Ltd is a constituent of the BSE 200 index. It has 52-week range of ₹110.30 - ₹67.75 with a market capitalisaiton of ₹1.05 trillion.  GMR Airports is the largest private airport operator in Asia. It operates Delhi, Hyderabad and a few other airports.  ==============================  Disclaimer: View and outlook shared belong to the respective brokerages/analysts and are not endorsed by Business Standard. Readers' discretion is advised.