Broker’s call: GMR Airports (Buy)

GMR Airports reported a soft growth in passenger numbers in August 2026, largely due to the newly added Nagpur and Bhogapuram airports. Excluding these, organic growth declined by 2.6% year-over-year. The decline was mainly driven by a persistent weakness at GHIAL, which dropped by 11.5% year-over-year. Domestic passenger traffic declined by 2.4% year-over-year at key airports, while international traffic rose marginally by 1.4% year-over-year.

This suggests that non-aero revenues are likely to sustain or improve. The brokerage expects the weakness in passenger traffic to continue until November 2026 due to the impact of the West Asia crisis. However, they anticipate passenger traffic growth to rebound from December 2026, largely due to favorable base effects caused by the IndiGo airline crisis in late CY25.

The brokerage values operational airports in India at GMR's long-term average 12-month forward EV EBITDA of 21x to derive their target price of ₹115 per share. They maintain a BUY rating for the stock, despite the recent fall in the share price. The brokerage believes that while the share price may continue to be muted in the near term due to soft passenger traffic, the headwinds seem to be largely factored in at current price levels, making the risk-reward position relatively attractive.