The global brokerage Jefferies reiterated a ‘Buy’ rating to GMR Airports and set a target price of Rs 125. This implies an upside potential of around 33% from current level.
Let’s take a look at the three reasons why the brokerage is bullish on the aviation stock and what is the rationale behind it –
Jefferies on GMR Airports: Strong earnings performance and return to profit
According to the brokerage report, GMR Airports delivered a strong quarterly performance despite softer passenger traffic growth. The company reported earnings before interest, tax, depreciation and amortisation (EBITDA) of Rs 1,710 crore. This was 73% higher year-on-year (YoY) and above estimates.
In its report, Jefferies described the quarter as a “Stellar quarter; Reiterate Top Pick”.
It further noted in its report, “Strong EBITDA beat; PAT turns profitable,” highlighting that profit after tax (PAT) turned positive for the first time in several quarters. After adjusting for one-time losses and foreign exchange impact, PAT stood at Rs 320 crore, compared to an estimate of Rs 170 crore.
The brokerage noted that “GMR delivered yet another strong beat despite soft traffic, with EBITDA at Rs 1,710 crore (+73% YoY), driven by new tariffs, strong non-aero growth, & scaling adjacent biz; the Co turned profitable for the first time in several quarters.”
Jefferies on GMR Airports: Growth in non-aero business and margin expansion
Another key highlight was the growth in non-aeronautical revenue. This includes retail shops, duty-free sales, food outlets and parking charges at airports. Non-aero revenue grew 14% YoY, even though passenger growth was modest.
According to the brokerage report, duty-free sales at Delhi and Hyderabad airports recorded their highest-ever monthly sales in December. The management has guided for over 15% long-term growth in non-aero revenue.
According to the brokerage report, cost control measures, operating leverage and lower revenue share payouts at Delhi airport supported margins.
Jefferies added that “Margin expansion” was visible across key airports and management expects further improvement as traffic growth picks up and spending per passenger increases.
Jefferies on GMR Airports: Balance sheet visibility and future projects
The brokerage also highlighted improving financial visibility. Net debt stood at Rs 34,500 crore at the end of December 2025, slightly higher compared to the previous quarter due to ongoing capital expenditure, including the Bhogapuram airport project. However, interest costs declined quarter-on-quarter.
As per the brokerage report, net debt is expected to peak as the Bhogapuram project nears completion. The airport is now 98% complete and expected to open around September 2026. Surplus cash generated at airport subsidiaries may either be moved upstream to the parent company or distributed as dividends.
The brokerage added that “GMR is a top play on India’s structural air travel growth, rising non-aero and RE monetisation levers across key hubs.”
Jefferies believes that the execution of large projects like Bhogapuram and rising monetisation opportunities in retail and real estate provide medium-term growth visibility.
Conclusion
Overall, for the GMR Airports, the brokerage house remains positive in improving profits, strong growth in non-aero income and better clarity on debt and future expansion.