Tariff revision at Delhi Airport and softening interest rates are likely
to help GMR Infrastructure return to profits in fiscal 2012-13 and give
some relief to investors.
GMR Infra has got approval from Airports Economic Regulatory
Authority to increase tariff at Delhi Airport by 353% from May 15. The
airports segment posted loss of Rs 115 crore in the quarter ended
December. The airports segment is the company's largest segment, which
contributed 42% to revenues for the third quarter.
Also, the company would save about Rs 25 crore per quarter in
interest costs due to a 50-basis-points drop in interest rates,
according to ETIG analysis. GMR Infra has been posting losses since the
past five quarters. In the December quarter, it posted a loss of Rs 191
crore. Besides the airport business, the company has also made huge
investments in the power sector.
It has almost 42,000-MW thermal capacity under development, out of
which 2,000 MW will be ready for operations in the first half of the
current fiscal and the remaining will be ready to commission in the next
fiscal.
For its 2,000 MW, which will become operational this year, the
company has coal linkage with Coal India and is expecting timely supply
of required coal. Once operational, these plants will help improve the
firm's cash flows. The company also has coal mines in Indonesia, which
it can use manage lack of coal availability from Coal India for its
upcoming capacity. If the company is able to receive coal from Coal
India, it will sell its Indonesian Coal in the open market, further
helping it improve cash flows.
In addition, the company's only gas-fired power plant is running at
low capacity due to limited gas availability from Reliance's KG basin.
Also, it is yet to receive coal linkage for one of its plants.
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