Despite the impact of one-off events on its quarterly results, GMR Group remains committed to achieving its targets and plans to expand operations both domestically and internationally. With its participation in airport privatisation initiatives and focus on West Asia, the Group wants to solidify its position as a prominent player in the aviation industry while driving growth and innovation in the sector.

Saurabh Chawla, Executive Director (Finance & Corporate Strategy), GMR Group, shared his insights on the Group's performance and future plans in an interview.

Below is the verbatim transcript of the interview.

Q: What is the runrate target for FY24?

A: I think fiscal year 2023 was a very good year. It was coming off the back of COVID. And we saw substantial improvement in our operations. If I were to adjust for the one offs in quarter four, our EBITDA was up by almost 81 percent to about Rs 540 crore. And for the full year on an adjusted basis, our EBITDA was up Rs 2,118 odd crore, which is up by about 71 percent year on year (YoY). So FY23 was a good exceptional year. But you need to actually correlate with the pre-COVID levels. And hence, I would say now, in fiscal year 2024, obviously, we will be building upon this tailwind and the momentum that we have in traffic as this business goes forward.

Q: You've spoken a little bit about how traffic has returned, talking about Delhi airport, specifically, what is the traffic as well as volume pickup that you've seen since FY23. And how have the trends been in quarter one? We understand the travel has been back with a big bang, but we want to understand the clear trend of volumes, we did see the May updates, but can you give us some more light or some more color on that?

A: For quarter four, the traffic at Delhi was about 17.7 million passengers, which is about 49 percent YoY growth. And this trend continues in the month of April and May. In April and May together the traffic in Delhi is up 19 percent YoY. So, the trendline is positive, the momentum continues to be positive. And as I said to you earlier, many parts of the world, which were shot recently as they open up, this traffic momentum will continue.

Also Read | GMR Airports gets Rs 631.24 crore from NIIF on subscription of debentures

Q: Coming to the total debt on books, you have done a couple of corporate actions. So how's the debt picture looking like post a fundraise via the FCCB route and what will the debt picture look like post the merger?

A: So, as you are aware, our corporate debt, which was always an issue, because there were no stable cash flows to support the corporate debt, it was about Rs 9,000 crore as of December of 2019. But, as on date that debt stands at zero and we are sitting on a cash of about Rs 573 crore at the end of March of this year, because we have paid substantial portion of the corporate debt from the FCCB raise that we did from ADP. So, that issue is behind us.

As we had articulated, we have created capacity for growth at the corporate level. Post the merger airport entities will be only at the next level of the list company and hence, there will be efficiency of evacuation of cash through dividends. Hyderabad is at a headstart because of low revenue share, but Delhi also in some time will start to declare dividends. Cash flow from the airport entities automatically will create substantial amounts of free cash for us to reinvest in new airport opportunities as we go forward.

Q: We want to understand - number one give us a breakup of the revenue of operations in the merged entity. What is the breakup, especially between the aero and the non-aero business that will give us a sense of how to evaluate the business going forward?

A: So on a merged entity basis, on a console basis, the aero business actually contributes 26 percent of the revenue and the non-aero business contributes about 65 percent. That's the broad breakup, while commercial property development contributes about 9 percent.

As we go forward, while aero will continue to contribute as a percentage, the growth that we expect will be more on the non-aero side of it because, as I was alluding to you earlier, the increased disposable income in the hands of the consumer is what we really want to tap. People who are going throughout the airports, we want to tap as much as possible their spend at the airport. So growth of the non-aero, which in the past has been around 14-15 percent on CAGR basis, that's how this business will grow.

Q: We want to also understand as you have spoken about increasing the share of the non-aero business. Tell to us a little bit more about your ambitions in the domestic market and the domestic businesses, and which are the key sectors that you're targeting in order to go ahead and increase the revenue share there?

A: We are in the airport sector. So as and when the new airports are privatised in India, which has been stated by the government, we will surely participate in those privatisations and increase our share of the airport business. That is something which is already there.

On the international side, we continue to look at airports in Southeast Asia specifically. So Indonesia, Philippines, Vietnam, Thailand, these are destinations where we see opportunities come by and we will surely tap into those opportunities at the right point of time as and when those governments open up for privatisation.

Q: Finally, please share with us your guidance that you have given for FY24. What internal targets are you working with, the revenues, EBITDA as well as bottomline? Now, what can we expect from GMR in FY24?

A: We refrain from giving guidance to the markets, we allow the markets to decipher themselves. But all that I can say is that the business has lots of tailwinds. As India's macro story continues to grow and gather momentum, aviation sector will be much better off and I think you can get some sense with the recent aircraft orders that the current airlines, whether it is Air India or IndiGo, have put in the marketplace, about where this market is going. We are probably going to be the second largest aviation market in a short period of time, very healthy market and airports have to support the airline businesses. So the more aircrafts are up there, more passengers will flow through our airports and that's the best part about our business.

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(Edited by : C H Unnikrishnan)

First Published:Jun 28, 2023 3:39 PM IST