GMR Infrastructure - Airport revenues on a thaw, Power awaiting its turn - Prabhudas Lilladher

Revenue tad better than our expectations: A stable performance on the Airport front (up by 65% YoY, excl. Male) was marred by lower EPC (-16% YoY) and Power (-12.8% YoY) revenues. Thus, revenues increased by 7.8% to Rs23.5bn against our expectations of Rs22.4bn.

Volume analysis: Pax traffic of DIAL was down 8.5% YoY and up 16.3% QoQ at 8.6m. ATMs also followed the above trend and were down by 10.7% QoQ and up by 1.2% YoY, while cargo was flat YoY and up by 3.7% QoQ. Similarly, HIAL experienced a YoY fall and QoQ jump in Pax (2.1m), ATMs (0.02m) and Cargo (0.2 tonnes) volumes. Turkey Airport experienced a 10% YoY growth in Pax. Number of units sold in power de-grew by 58% YoY and 25% QoQ to 367m units and BOT Road traffic was up 20.7% YoY.

EBITDA fares well: Consolidated airport EBITDA margins were up by 1200bps YoY at 37% on account of revision in aero chares at DIAL. Power, however, on a consolidated basis, experienced an EBITDA loss, mainly on account of lower PLFs in gas-based plants and stoppage in mining activities at coal mines. EPC segment clocked margins at 15%.

Persistant QoQ losses remain: For Q3FY13, forex losses stood at Rs320m, thus, loss after minorities was at Rs2.8bn. Segment-wise PAT contribution from Airports stood at Rs(218)m, Power Rs(1.5)bn, Roads BOT Rs(172)m and EPC Rs366m.

Valuation: At CMP, the stock is trading at 1.2x FY15E P/BV. Gas/coal shortage for nearly 3000MWs power plant, which is nearing COD, is the overhang. Though operational performance of existing assets has shown some improvement, pressure on financials will persist as cash flow continues to suffer going forward. Maintain 'Accumulate'.

Source : Equity Bulls

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