GMR reported disappointing set of numbers led by significant apportionment of corporate expenditure in major verticals and also forex MTM loss at overseas subsidiaries. GMR reported flat revenues at Rs 19.4bn led by a muted 7% yoy growth in Airport revenue to Rs 11.5bn. Energy vertical witnessed a decline of 12% yoy at Rs 5.3bn due to lower PLF in the power segment, adjusted EBITDA witnessed down 16.3% at Rs3.7bn due to allocation of annual corporate costs for the airport segment, lower PLF, and Rs480mn management fee paid in the EPC segment. Consequently, GMR reported an adjusted net loss of Rs1.52bn which was higher than our estimate of Rs 0.7bn. Reported loss came in at Rs 3.7bn, much higher led by exceptional expense of Rs 1.6bn at Delhi airport and tariff reversal of capacity charge at Vemagiri plant.”
“Turnaround in the aviation vertical is expected from 1QFY13E led by implementation of tariff order. We believe GMR will regroup its focus on monetisation of land parcel which will further enhance the operating performance. Moderating the traffic growth assumptions for DIAL & ISGIA, building little delay in land monetization, lowering PLF and increased fuel cost assumption, introducing the estimates of Ahmedabad ��" Kishangarh all leading to downwards revision. Downgrade our rating to Hold with a target price to Rs 32 from Rs22
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