GMR Infrastructure-No surprise in 2Q results: Anand Rathi

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GMR Infrastructure
No surprise in 2Q results; partial capitalization of T3 in 3Q
 Revenues in line, EBITDA lower. GMR Infra reported consolidated
revenue of `12.2bn, which was 6% higher than our estimate (`11.6bn).
Consolidated EBITDA was 19% lower than our estimate, mainly on
higher opex in DIAL-related to partial CoD of T3. GMR saw net loss of
`692m adjusted for one-time write-back of `1.4bn towards vendor
advances related to Island Power. Consolidated cash profit was `2.4bn.



 Airports and Power weak, Roads steady. Airport EBITDA fell 25%
yoy due to higher opex of T3 booked in 2Q for the Jun-Sep ’10 period;
cargo volumes grew sharply in all the three airports. Higher depreciation
and interest costs due to T3 capitalization impacted profitability. Power
segment EBITDA was up ~80% qoq, boosted by higher merchant sales
by GEL (Tanir Bavi); it was 10% below our estimate, due to lower PLF
(40%) in Basin Bridge. Road segment EBITDA was steady and in line at
`783m, up 3% qoq on an adjusted basis. EBITDA from the ‘Others’
segment fell ~20% qoq due to consolidation of GHIAL’s hotel division.

 T3 partially capitalized. About 46% (~`43bn) of the approved TPC
pertaining to T3 was capitalized in 2Q. After the shifting of domestic
operations (on 11 Nov), the remaining TPC would be capitalized in 3Q.
 Project updates. GEL (Tanir Bavi) has been fully operational since Aug
’10, but only at 70% capacity due to lack of gas supplies; the 170MW
output is mainly being sold to APTRANSCO (100MW) at `4.3/unit.
Hungud-Hospet and Vemagiri expansion projects achieved FC in 2Q.
About `16bn of outstanding consolidated loans have been pre-paid.
AERA approved an ad hoc hike in UDF charges at HIAL; upfront fee
(US$78m) for Male airport was paid in Oct ’10 via short-term
borrowings in the SPV.

 Maintain our long-term positive view. We retain Jun ’11 TP of `75,
based on SOTP. Catalysts are: i) regulatory approval for higher user
charges (e.g., UDF) to recover regulated revenues in DIAL, ii) gas
allocation by the EGoM and iii) divestment of stake in InterGen.