GMR Infrastructure on Wednesday reported a 32.7% increase in consolidated net profit to Rs 71.1 crore in the July-September quarter on growth in its airports business as against Rs 53.6 crore in the corresponding period last year. Revenue increased 2.3% to Rs 1,221 crore in the same period, with the airports business growing 42% on higher passenger traffic. However, revenues from the group?s energy arm declined 8% due to lower operations in its Chennai power plant and lower power trading revenues. The company also achieved break-even at the Rajiv Gandhi International Airport in Hyderabad during the quarter, booking a net profit of Rs 2 crore. GMR Group CFO Subbarao Amarthaluru told FE’s Ajay Sukumaran that the airports sector will drive growth over the next fiscal after which the company expects to commission new power plants.
Typically, a larger chunk of GMR?s revenue comes from energy, but this quarter they are on par. Will more revenue now come from airports?
This is the first time. Earlier, energy was always higher. This quarter, airports have gone up by 40%, energy has come down by 8%. For the next one and half years, revenue from airports will be high. Male airport is going to make a difference, it will add $150 million revenue. Hyderabad airport will give additionally about Rs 120 crore revenue because of the higher UDF (user development fee) and the natural growth.
In Delhi airport, the tariff fixation will happen post the completion of the airport so that would yield additional revenue and Sabiha Gokcen also there is close to 90% traffic growth. So, every year, 80% revenue growth is happening. These are the developments that would happen, but one power plant of 800 MW will make all the difference.
When will that happen? Now, your capacity is 808 mw what would be the addition?
From fiscal 2012-13. In the last quarter of 2001-12, the Vemagiri expansion will happen so that will not add revenues in that year. But 2012-13 will be full period revenue for that plant. In the next financial year, 768 mw will get commissioned. In 2012-13, 2000 mw will get commissioned.
This quarter, the barge-mounted plant at Kakinada went on-stream. How come it has not offset revenue decline in the energy business?
The last quarter was the first for the plant (since relocation from Tanir Bhavi). Again only part of the capacity was in operation because of two reasons: there was delay in the combined cycle operations and also gas was not available to full capacity. So, the capacity of that plant was not fully in use. From this quarter, it should be good.
Recently, you announced two power transmission projects in Rajasthan. What is the opportunity you see?
These are two small projects, but the opportunity is big in the country.
There is also going to be huge competition because it is a very safe business as it is annuity-based.