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My View On GMR Infrastructure


About The Company

The company has a reputed working management well known for its quality work. The stock has been in lime light in the recent bull run.

About The Results

The company has posted results for the quarter ended 31st Dec 2008 , which has shown a dip in profit due to forex losses. PAT, on a YoY after the forex loss was down by 36.26% at Rs.40.84 crore. But if one were to see the PAT without the forex loss, it was up 4.71% at Rs.66.08 crore.

The said notional foreign exchange loss being Rs.25.24 crore for the quarter, accounted mostly by two of the company’s subsidiaries viz., Vemagiri Power Generation Limited (VPGL) and GMR Hyderabad International Airport Limited (GHIAL). This was on account of the conversion of the foreign currency project loans borrowed by them into rupees. These two subsidiaries have adequate dollar revenues to provide natural hedge for the currency fluctuations that may arise with respect to interest and principal payments/repayments. What also impacted the bottomline was the lower air traffic and higher interest costs.

The net revenue of the company was up by a healthy 79.28% at Rs.959.15 crore. This surge in the topline was mainly on account of the induction of revenues from Hyderabad Airport and Istanbul Airport and also due to the increased power sector revenues.


Clues In the Company

1. Delhi International Airport Private Ltd. (DIAL),despite overall passenger traffic declining by 8% for the quarter, the outlook remains good. New domestic terminal is getting ready for launch by March, 09. The construction of the new integrated terminal (T3) is progressing as per schedule and 53% of the work has been completed as on date. Bids for commercial property development have been received and the process of award of contract is expected to be completed shortly.

2. 45% construction work on the Sabiha Gokcen International Airport (SGIA), Turkey has been completed commercial operation is scheduled by end October 2009. The construction of the new 3 storied car park facility has been completed and will be commissioned for operations from April 2009.

3. In its power segment, the Chennai plant has achieved a Plant Load Factor of 80.02%. GMR Energy restarted its generation as a merchant plant with effect from November 4, 2008 and is supplying power on a ‘Round-the-clock’ basis to Bangalore Electricity Supply Company Limited (BESCOM), through GMR Energy Trading Limited. The Vemagiri Power Generation Limited (VPGL) resumed operations from December 2008 based on diverted gas as per direction of Ministry of Petrol & Natural Gas, Government of India.

4. Regarding its highway projects, GMR Ambala-Chandigarh Expressways Private Limited (GACEPL), started commercial operations from December 10, 2008. The company has been shortlisted for submission of price bid for Hyderabad - Vijayawada (182km) for which price bid will be submitted in February, 2009. The other three road projects under construction, comprising of one annuity and two toll projects will be operational in the coming months before March 09.

5. There has also been concern over the company having Price Waterhouse as its auditors but the company has decided to continue with the services of Price Waterhouse and said any decision on replacing the external auditor would be taken only in the next financial year. The board decided to constitute a corporate governance committee comprising independent directors. GMR has six independent directors on its board. It has also decided to appoint two joint auditors, a multinational and an Indian audit firm, as statutory auditors from 2009-10. They will be subject to rotation every four years.

About The Stock

Wait for some more panic to get justified price of the stock.

Disclaimer : I do not have any personal holding in this stock.