/** blogpostTitle: GMR Airports FY26: Tariff Reset, Platform Growth, and a Return to Profit blogpostSlug: gmr-airports-fy26 blogpostCoverImageDescription: An ultra-realistic corporate finance scene showing a clean dashboard on a large monitor with four main charts: a year-on-year growth bar chart for gross income rising from 108.4 to 152.0 (in INR bn), a year-on-year growth bar chart for EBITDA rising from 41.9 to 61.5 (in INR bn), a line chart for net debt steady around 340 (in INR bn), and a passenger traffic bar chart for FY26 showing 121.6 million passengers excluding Cebu. In the background, a modern airport terminal interior with glass and steel architecture is softly out of focus. No logos or text labels, only the charts and neutral UI elements. blogpostShortTitle: GMR Airports FY26 profit turnaround drivers */

GMR Airports FY26: Tariff Reset, Platform Growth, and a Return to Profit

GMR Airports Limited (GAL), operating under the GMR AERO brand, closed FY26 with a clear inflection on profitability. Consolidated gross income rose to INR 15,200.8 crore in FY26, up 40 percent year on year. EBITDA increased to INR 6,150.2 crore, up 47 percent, with an EBITDA margin of 52 percent. The most notable milestone was consolidated PAT of INR 472.4 crore, compared with a loss of INR 816.9 crore in FY25. Management called this the first positive PAT in over a decade.

Q4FY26 was also strong on headline numbers. Consolidated gross income came in at INR 4,042.9 crore, up 36 percent year on year, while EBITDA was INR 1,549.4 crore, up 38 percent. PAT for the quarter was INR 400.5 crore, compared to a loss in Q4FY25.

The operating backdrop was not smooth. Management flagged geopolitical conflicts, airspace closures, and higher fuel costs for airline partners as near-term headwinds. But they positioned FY26 as evidence that the core thesis remains intact: long-duration airport concessions with a tariff framework that can lift aeronautical yields, plus a growing set of non-aeronautical adjacency businesses that behave more like a consumer platform.

Traffic stayed resilient, even when growth was muted

Passenger traffic at GAL owned airports (excluding Cebu) was 121.6 million in FY26, up 0.9 percent year on year. Q4FY26 traffic was 31.7 million, up 0.7 percent year on year. The mix had a familiar pattern: domestic demand held up better, while international faced route disruptions linked to Middle East airspace constraints.

Delhi remained the anchor asset at 78.7 million passengers in FY26, with Hyderabad at 30.5 million and Mopa (Goa) at 5.4 million. Medan handled about 7.0 million passengers in FY26.

Management emphasized that temporary disruptions have historically been followed by a recovery in traffic momentum. For FY27, they indicated that the first half may remain softer, with conditions expected to improve in the second half.

Delhi tariff reset did the heavy lifting

Delhi International Airport (DIAL) was the clearest contributor to the earnings step-up. The presentation links the surge in aeronautical revenue to the revised tariffs implemented from mid-April 2025, under Control Period 4. DIAL’s standalone aeronautical revenue increased materially in FY26, and the airport reported record profitability.

DIAL standalone FY26 net income was INR 4,421.2 crore versus INR 3,237.8 crore in FY25. EBITDA rose to INR 2,882.4 crore from INR 1,752.9 crore. PAT turned positive at INR 476.9 crore compared with a loss of INR 976.2 crore in FY25.

Operationally, Delhi also pushed capacity on the international side. Pier C at Terminal 3 was converted from domestic to international use, which the company said increased Terminal 3’s annual international capacity by 50 percent to 32 million passengers and raised wide-body stand availability by about 40 percent. Management said this should cover about the next 3 to 5 years of international traffic growth, while also supporting higher-yield non-aero monetization as more international passengers move through expanded retail and F&B zones.

Hyderabad stayed steady, with lower debt cost as a lever

Hyderabad (GHIAL) continued to look like a stable cash-generating asset. FY26 passenger traffic was 30.5 million, up 3.4 percent year on year. Total income increased to INR 2,578.5 crore from INR 2,350.4 crore. EBITDA rose to INR 1,614.2 crore from INR 1,475.4 crore, and PAT increased to INR 426.9 crore.

A notable FY26 action was refinancing. GHIAL raised INR 2,100 crore of 15-year NCDs at a 7.6 percent coupon and used proceeds to refinance dollar-denominated debt. The company expects interest cost savings of more than 150 basis points. CRISIL revised GHIAL’s outlook to Positive while reaffirming the rating at Crisil AA+.

Hyderabad also advanced its cargo strategy by commissioning Cargo Terminal 2 with an initial capacity of about 50,000 tonnes per annum and expansion space to double to 100,000.

Goa: traffic ramps up, but PAT remains negative

Mopa (Goa) continued to scale traffic, with FY26 passengers at 5.4 million, up 15.2 percent. Q4FY26 traffic was 1.54 million, up 21.3 percent. Non-aero revenue grew sharply in Q4FY26, up 28.2 percent year on year.

But profitability at the bottom line remains under pressure. Goa’s standalone FY26 PAT was minus INR 331.2 crore. Management attributed weaker aeronautical revenue to airline incentive programs aimed at building route density. This highlights a key dynamic for new airports: volumes can grow quickly, but interest and depreciation charges can keep PAT negative until the asset matures.

Platform businesses are now a material pillar

A major FY26 theme was the scaling of the GAL platform and adjacency businesses. The FY26 proforma composition of consolidated revenue from operations shows DIAL at INR 7,568.0 crore and GHIAL at INR 2,439.8 crore, but also meaningful contributions from platform businesses such as cargo and MRO Hyderabad (INR 938.5 crore), car park Delhi (INR 310.4 crore), and F&B Hyderabad and Goa (INR 142.3 crore).

Two moves stand out.

First, duty free. GAL began operating Delhi duty free from 28 July 2025 and Hyderabad duty free from 10 September 2025. In the deck’s FY26 platform table, Delhi duty free revenue is INR 1,602.3 crore and Hyderabad duty free revenue is INR 348.4 crore. Management also highlighted operational milestones like lounge duty free sales at Delhi and Hyderabad from January 2026 and implementation of the higher baggage allowance of INR 75,000.

Second, cargo. GAL was awarded the concession to upgrade and operate Cargo Terminal 1 at Delhi. The company had been running cargo operations on an interim basis since 15 May 2025 after termination of the previous concession.

This platform strategy is important because it can add earnings with relatively lower capital intensity compared to terminal expansion. Management explicitly framed the company as a blend of a utility business, a consumer platform, and a real estate platform.

Projects and capital allocation: Bhogapuram and real estate come next

Bhogapuram (Visakhapatnam) is close to commissioning. The company reported 98.7 percent overall progress as of 31 March 2026 and aims to operationalize the airport by Q2FY27, earlier than the original December 2026 target. The multi-year tariff proposal for Bhogapuram is under AERA review, and management expects an ad-hoc tariff before operations.

On capex, management guided that Bhogapuram will see final payments of about INR 70 to 80 crore in FY27, after spending about INR 180 crore in FY26. They also mentioned about INR 20 crore of debt for Nagpur, and real estate capex of about INR 450 crore in FY27 for ongoing Delhi projects.

The real estate pipeline is becoming more visible. At Delhi, Aerocity One is a self-development office project of about 1 million square feet with expected handover in Q3FY27. There is also a build-to-suit terminal hotel of about 380 keys. At Hyderabad, the GMR Interchange retail project is under construction.

What to watch from here

The FY26 print shows the operating model working as intended when tariffs and traffic are supportive. Delhi’s tariff reset has lifted aeronautical yields sharply, while the platform businesses are scaling to improve non-aero monetization. The next leg depends on execution and normalization.

Management’s near-term stance is cautious. They expect the next two quarters to remain challenging due to geopolitical disruptions, with improvement likely in the second half of the year. They also said it is reasonable to assume 5 to 7 percent overall traffic growth, supported by additions of Bhogapuram and Nagpur into the portfolio from Q2FY27.

For investors, the story is now less about whether the company can reach profitability and more about whether it can sustain cash generation while reducing leverage. Net debt stood at INR 34,000 crore as of 31 March 2026, and management stated net debt to EBITDA was 5.5x and is poised to move below 4x over the next 18 to 24 months.

The next milestones are clear and measurable: Bhogapuram commissioning, tariff outcomes at Hyderabad and Bhogapuram, delivery of Aerocity real estate handovers, and continued scaling of duty free and cargo concessions. If these execute on schedule, FY26 may be remembered as the year the platform stopped being a promise and started behaving like a diversified airport-linked earnings engine.