Analysts expect traffic recovery from the second half of FY27, commissioning of Bhogapuram airport in Q2FY27, and the addition of Nagpur airport could support medium-term growth, analyst said
Summary
Analysts expect traffic recovery from the second half of FY27, commissioning of Bhogapuram airport in Q2FY27, and the addition of Nagpur airport could support medium-term growth, analyst said
After a period marked by geopolitical tensions, airspace disruptions and volatile fuel prices, GMR Airports is pinning its hopes on recovery in passenger traffic from the second half of FY27.
While recent disruptions have weighed on travel demand, the full impact of the West Asia crisis is yet to reflect in earnings and stock price. Despite that, analysts remain hopeful of the airport operator’s medium-term prospects, citing tariff tailwinds, airport additions and improving cash flows.
Earlier this year, the private airport operator was seen as a relatively defensive bets within the aviation ecosystem because of its steady annuity-like revenue streams.
However, the broader market correction has not spared the stock. Shares of GMR Airports have declined about 8% so far in 2026, reflecting growing investor caution over near-term traffic trends even as the company’s long-term growth outlook remains intact. The stock is currently trading 1.2% higher at ₹98.2 apiece on the NSE.
Bloomberg data showed five brokerages have a ‘buy’ recommendation on GMR’s stock, and only one has a ‘hold’ rating.
In Q4 FY26, GMR swung to a profit after tax of ₹400 crore from a loss of ₹253 crore in the year-ago quarter due to strong operational performance. Total income rose sharply to ₹4,043 crore during the quarter, compared with ₹2,977 crore a year earlier. Earnings before interest, taxes, depreciation, and amortization (Ebitda) grew 43% on year, with margin expanding to 36.7% versus 35.2% on-year, led by operating leverage and improved revenue mix, analysts said.
Priyankar Biswas, industrials & logistics research analyst at JM Financial Institutional Securities, believes the impact of the West Asia crisis has, in all likelihood, not been fully priced into the stock yet.
With a reduction in the number of flights, international passenger traffic declined, leading to a drop in non-aero revenues, which are largely driven by international travellers. “Aero and non-aero business revenue is more or less balanced,” Biswas noted.
The hit to the non-aero business—a key source of optimism around GMR—has weighed on near-term sentiment. Biswas believes the full impact could play out over the next couple of quarters.
That said, GMR’s standalone business has performed strongly, emerging as a silver lining amid broader uncertainty, he pointed out.
JM Financial Institutional Securities has trimmed its estimates by 2-3%, factoring in lower-than-expected spend per passenger and potential traffic headwinds from the geopolitical crisis. The brokerage, in its 28 May note, has maintained its ‘buy’ call on the stock with a target price of ₹115.
In its 28 May post-Q4 earnings conference call with analysts, GMR said geopolitical conflicts have sharply increased jet fuel prices, which now account for 55-60% of its airline partners’ operating costs. Combined with airspace closures, this has led airlines to rationalise capacity, including the temporary suspension of some international routes during the summer.
“Consequent fuel surcharges have driven up airfares, causing a temporary slowdown in immediate passenger traffic,” said Saurabh Chawla, executive director, finance & strategy, GMR Airports.
Work on the new airport construction is steadily progressing. “At Bhogapuram, 98.7% of physical progress has been achieved as of March ’26, and we aim to operationalize the Bhogapuram Airport in quarter two of the current year, much ahead of our original target date of December ’26.”
With Bhogapuram airport operations in FY27, the addition of Nagpur airport, a likely tariff hike at Hyderabad airport, and continued monetisation of commercial real estate, GMR Airports is well-positioned for the next phase of Ebitda growth and cash flow generation, said Ankita Shah, vice president at Elara Capital.
She added that lower capital expenditure intensity and improving leverage are likely to support gradual deleveraging over the medium term. “Valuation appears supported by improving earnings visibility, upcoming additions of airports and gradual deleveraging.”
Elara Capital, in its 28 May report, values the aero business—a regulated, fixed-return on equity segment—at 12 times Ebitda, in line with utility peers, while valuing the structurally growing non-aero business at 35 times Ebitda, in line with consumer discretionary peers. The brokerage has retained its ‘buy’ rating on GMR’s stock with an unchanged target price of ₹140.
Meanwhile, ICICI Securities, in a 29 May report, has maintained its ‘hold’ rating, citing ‘expensive valuation’.
However, the brokerage said, “We expect traffic recovery from H2FY27; commissioning of Bhogapuram in Q2FY27 and the addition of Nagpur airport could support medium-term growth”.
For GMR Airports, FY26 was eventful with one-off events limiting passenger growth to 1% across core airports. Despite this, GMR posted its first full-year of profit in over a decade, supported by a tariff hike at Delhi airport and higher contribution from non-aero businesses, ICICI Securities said.
Key monitorables over the next 12-18 months, according to the brokerage, include traffic recovery at Delhi and Hyderabad airports, tariff order for Hyderabad airport, the Supreme Court’s order on Delhi concession agreement, and the order on HRAB (Hypothetical Regulatory Asset Base) for Delhi airport.
Some market participants also believe air traffic could remain under pressure amid elevated aviation fuel prices and continued disruption in international travel linked to the West Asia war.
