GMR Airports' sales grew 12% last quarter, but operating profit barely moved

GMR Airports, which runs the airports at Delhi and Hyderabad and a handful of smaller ones, grew its sales 11.7% in the September 2026 quarter compared with a year earlier. Its operating profit, what is left of sales after running costs but before depreciation and interest, rose just 2.3%. Of each extra rupee of sales, less than 8 paise reached operating profit, calculated from the filed results, and the operating margin slipped from 39.4% to 36.1%.

That is a break from the quarter before, when operating profit grew in step with sales and the margin edged up on a year earlier. The company's own measure, EBITDA, which also leaves out depreciation and amortisation, showed the same stall: it rose 2% while total income rose 12%.

Asked why, Saurabh Chawla, executive director for finance and strategy, said the newly consolidated airport at Vizag, which opened during the quarter, and the one at Goa had both pulled EBITDA down. The airport figures the company gave on the same call are hard to square with that. Vizag's EBITDA was a small loss over its first weeks and Nagpur, also new to the group, made a small profit; an executive agreed that the two together gave EBITDA a small lift. Goa's EBITDA doubled from a year earlier. The movement came from the two large airports: Delhi's EBITDA rose 12% and Hyderabad's fell 7%.

Added together, the five airports' EBITDA rose by roughly ₹68 crore, by our calculation, while the group's rose by about ₹40 crore. That leaves the rest of the group, including its duty-free, cargo and other businesses run across the airports, a few tens of crore lower than a year earlier. The figures are rounded and Delhi's year-earlier EBITDA is implied from its stated growth rate, so the gap is approximate. Our arithmetic gives the size of the gap, not its location. In a separate answer, Chawla said lower passenger numbers at Hyderabad had held back revenue growth in the parent company's own accounts. When an analyst asked whether anything besides Vizag had hit EBITDA outside the three main airports, Chawla said no.

A thin operating gain matters at GMR because so much sits beneath it. Interest took two-thirds of operating profit last quarter, and profit before tax was smaller than other income, the income the group earns outside its operations. Vizag will add to that for a while: an executive said its full interest cost will show in the next two quarters, and that its loss in the current quarter is likely to match the last one until a full tariff, expected by January, replaces the temporary one.

Delhi, the airport doing most of the growing, is being helped by a charge management expects to fade. An executive said Delhi's aero yield, the airport charges collected per passenger, has risen above ₹440 against the ₹365 the regulator set, mainly because parking fees for aircraft now climb steeply the longer a plane stays on the ground. In February management told analysts to assume at most ₹375. Airlines have started turning their aircraft round faster, and the executive expected the higher rate to hold for perhaps another year before falling back. The executive also agreed that the excess would count as over-recovery, to be offset when the regulator sets Delhi's next tariff period.

Passengers are giving less help than the company planned for in May, when it guided to traffic growth of 5% to 7% for the year. Traffic rose about 1% in the first half, and for the full year an executive now expects it to be "up by about 3% or 4%".

A further lift for Delhi could come from the courts. The appellate tribunal, TDSAT, ruled for the airport on every point it had contested in the regulator's current tariff order, and an executive said the regulator is taking the matter to the Supreme Court. Chawla said any benefit would most likely arrive in the next fiscal year and declined to estimate its effect on EBITDA while the case is before the courts.