Kotak Institutional Equities has maintained a Sell rating on GMR Airports, while raising the target price to ₹74. This adjustment incorporates two recent developments: GMR Airports Limited (GAL) securing the Delhi Duty-Free business and the consolidation of its stake in Delhi International Airport Limited (DIAL).
However, Kotak cautions investors against a simplistic view of GMR Airports as a monopolistic play on non-aero growth. They highlight several key concerns:
- Limited capacity at the top three airports.
- Minimal contribution from incremental assets to overall portfolio value.
- The necessity to compete with Noida Airport as it grows.
- Increasing support for another listed group entity.
Additionally, Kotak stresses the need for investors to account for the impact of the 13.8 billion diluted share count when calculating the correct trading multiple, which is projected at 25x FY2027 EV/EBITDA. The firm remains cautious despite recent positive surprises, urging a more nuanced view of GMR Airports’ growth prospects.
