INSUBCONTINENT EXCLUSIVE:
Edelweiss Securities has a buy call on GMR Infrastructure with a target price of Rs 23.
The current market price of GMR Infrastructure is Rs
17.
Time period given by analyst is one year when GMR Infrastructure price can reach the defined target
Investment rationale by the brokerage-Airports business soaring: Having emerged as the highest bidder for the Bhogapuram and Nagpur
The company has recently received the formal letter of award for the Nagpur airport
While capex at the Hyderabad (HIAL) and Goa airports are already underway, about Rs 90bn of capex for DIAL is likely to be incurred from
Management expects a consultation paper for DIAL to be released over the next month and the final tariff order around mid-CY19
With the Indian airport sector booming, there are ample growth opportunities for the company in our opinion.
Power and road portfolios
bouncing back: After a tough couple of years when issues with coal availability/tariffs and traffic growth dragged the power and road
In the roads segment, the company has covered ground with improving traffic paring losses
In power, higher coal supplies and tariff approval have energised the Kamalanga and Warora plants into generating cash profits
Management does not have any capex plans for these segments and intends to consolidate its operations thereof.
Outlook and valuation-
the most exciting play on the fast-growing Indian airport sector
Favourable tariff orders and steady monetisation of non-core assets, which could lead to deleveraging, are the key catalysts for the stock
Maintain 'BUY/SO' with a SoTP-based target price of Rs 23.
