GMR posted revenue of Rs12.2bn, up 4.6%, driven by the airport division, which was up 32% YoY in top-line terms, helped by pick-up in passenger traffic of ~20% YoY in DIAL and HIAL and 93% growth at SGIA. The operation of only 100 MW (of 235 MW) at the barge-mounted power plant due to its relocation and the completion of construction of Sabiha Gocken airport resulted in GMR posting revenue declines of 7% and 65% at the power and construction divisions, respectively
The contribution from the airport division led to GMR reporting EBITDA of Rs3.7bn (up 17% YoY). Although GMR reported a sharp rise in other income of Rs673mn (mainly duty entitlements and forex gains taken as other income and investments in mutual funds of the QIP money of US$300mn raised in the quarter), the high interest and depreciation costs led to PBT increasing by 15% YoY. PAT was up 32% YoY mainly on account of lower taxes vs. F1Q10.
For an asset developer like GMR, we believe that quarterly results will not matter much for the stock since we view the stock as an asset story based on long-term sustainable cash flows, rather than short-term earnings surprises.
