Jefferies has reiterated a buy rating on GMR Airports with a target price of ₹100, citing potential upside from a favorable ruling on the Highly Regulated Asset Base (HRAB) for Delhi International Airport (DIAL).
The Telecom Disputes Settlement and Appellate Tribunal (TDSAT) recently quashed the Airports Economic Regulatory Authority’s (AERA) earlier computation of HRAB for DIAL and directed a fresh calculation. The HRAB, a notional asset base, is critical in determining aero tariffs for airports.
Jefferies noted that TDSAT found AERA’s methodology for calculating HRAB to be incorrect, and if the final ruling favors DIAL, it could allow the airport operator to recover significant under-recoveries from the past. This would meaningfully enhance DIAL’s tariff recovery and profitability going forward.
The brokerage highlighted that other debated under-recoveries are also under review, which could further add to the upside potential in DIAL’s earnings if resolved favorably.
Meanwhile, the shares of GMR Airports continue to trade actively as investors await clarity on the final HRAB calculation and its impact on future profitability.
