BackKotak Securities sees 30% upside in this infra stock in medium to long term
GMR Infra share: Kotak Securities report says that the improvement is ATV is likely attributable in large part to the changing passenger habits of avoiding a trip to a mall during Covid times and thus shopping on the go at an airport
PremiumGMR Infrastructure shares are under consolidation phase for last 6 months. After ushering in new year 2022, this infra stock has dipped more than 20 per cent. However, on account of strong recovery in passenger volume at Delhi and Hyderabad airports, Kotak Securities sees strong upside in GMR Infra shares. The brokerage is expecting GMR Infra share price to go up to ₹48 per share levels in medium to long term.
Highlighting the reason for being bullish on GMR Infra shares, Kotak Securities latest research report says, "GMRI’s airports in Delhi and Hyderabad have seen a faster recovery in domestic volumes versus their counterparts. The recovery rate or ratio of March 2022 domestic passenger volumes to February 2022 pre-Covid levels is higher at 91-92% for GMRI’s airports versus 84-85% for Mumbai and Bengaluru airports. This is again a testament to the active role an airport operator can play in planning routes with airlines and adding new destinations. Hyderabad airport has added 16 domestic and four overseas destinations during Covid times."
The brokerage went on to add, "Our recent visit to GMRI’s Hyderabad airport suggests a meaningful improvement in average transaction value (ATV) in retail for domestic passengers. On March 22 basis, ATV has improved to close to 140% of pre-Covid levels. None of the brands left the airport during Covid times. In fact, the airport has added retail area in the domestic terminal from the lesser utilized international terminal area. The spending intensity per unit for retail has accordingly improved to close to 120% of pre-Covid levels and would have improved even more in recent times as domestic passenger count has recovered to pre-Covid levels."
The brokerage went on to add that the improvement is ATV is likely attributable in large part to the changing passenger habits of avoiding a trip to a mall during Covid times and thus shopping on the go at an airport.
On suggestion to positional investors in regard to GMR Infra shares, Kotak Securities report says, "The Fair Value of existing airports assets of a value creator in GMRI would always be a moving number. We also note the add-on value of GMRI monetizing its capabilities and cash flows in new airport wins from here. We will revisit our ₹48 FV after full-year results."
Disclaimer: The views and recommendations made above are those of individual analysts or broking companies, and not of Mint.
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