GMR Airports' margin falls for third straight quarter as costs outpace revenue
Year-on-year profit improved on lower interest and tax rates, but sequential earnings fell 55.81% as the tax rate rose 18.71 percentage points.
Filed 28 Oct 2026, 23:29 IST · after market close · GMR Airports Ltd (GMRAIRPORT)
Key takeaways
- Consolidated net profit rose 86.48% year on year to Rs 65.38 cr, helped by a lower tax rate but weakened sequentially by 55.81%.
- Operating margin fell 3.4 percentage points year on year to 36.03% as expenses grew 17.86%, faster than revenue at 11.59%.
- Other income equalled 107.65% of pre-tax profit, making reported earnings quality a key issue this quarter.
Price around the results
Revenue grew, but operating leverage weakened
GMR Airports reported consolidated revenue growth of 11.59% year on year and 3.32% quarter on quarter in Q2FY27. Expenses grew faster at 17.86% year on year and 4.09% sequentially, limiting operating-profit growth to 1.97% and 1.96%, respectively. Operating margin therefore narrowed 3.4 percentage points year on year and 0.48 percentage points sequentially to 36.03%.
Tax and other income shaped the profit outcome
Pre-tax profit rose 33.2% year on year but fell 38.44% sequentially, as interest costs increased 5.84% quarter on quarter and depreciation rose 8.28%. The tax rate climbed 18.71 percentage points sequentially to 52.41%, contributing to the 55.81% sequential decline in net profit; year on year, the tax rate was 13.6 percentage points lower. Other income was 107.65% of pre-tax profit, so the reported profit was heavily supported by non-operating income.
Margin has declined for three straight quarters
Operating margin has fallen from 42.58% in Q3FY26 to 36.68% in Q4FY26, 36.51% in Q1FY27 and 36.03% in Q2FY27. Even after that decline, GMR Airports remained 12.15 percentage points above the 23.88% median operating margin of the 15 Services-sector peers that had reported.
New airport assets and commercial projects add to the platform
Management said international operations commenced at Pier C of Terminal 3 at Delhi Airport, while Vizag Bhogapuram Airport began commercial operations on 17 August 2026. The presentation said DIAL is developing a commercial office building with approximately 1 million square feet for handover within FY27, and a build-to-suit Taj terminal hotel with approximately 380 keys and 0.6 million square feet, with partial operations expected in Q4FY27. Management also said it remains focused on premiumization, margin expansion and further optimisation of the cost of debt.
No immediate market reaction; past moves have skewed lower
The results were filed after market close, so there was no market reaction to report yet. Across the stock's last eight results reactions, it rose three times and fell five times, with a median absolute move of 1.48%.
Q2FY27 at a glance
Consolidated figures as filed with NSE — filed ahead of third-party databases, not yet independently cross-checked.
| Line item | Q2FY27 | Q1FY27 | QoQ | YoY |
|---|---|---|---|---|
| Revenue | ₹4,095 cr | ₹3,964 cr | +3.32% | +11.59% |
| Other income | ₹148 cr | ₹170 cr | -12.79% | +13.74% |
| Expenses | ₹2,620 cr | ₹2,517 cr | +4.09% | +17.86% |
| Operating profit | ₹1,476 cr | ₹1,447 cr | +1.96% | +1.97% |
| Operating margin (%) | 36.03% | 36.51% | — | — |
| Interest | ₹993 cr | ₹938 cr | +5.84% | -4.78% |
| Depreciation | ₹493 cr | ₹456 cr | +8.28% | +14.37% |
| Profit before tax | ₹137 cr | ₹223 cr | -38.44% | +33.20% |
| Tax | ₹72 cr | ₹75 cr | -4.27% | +5.76% |
| Net profit | ₹65 cr | ₹148 cr | -55.81% | +86.48% |
| EPS (₹) | ₹-0.01 | ₹0.09 | — | +75.00% |
Operating margin of 36.03% compares with a Services sector median of 23.88% across 15 peers that have reported Q2FY27.
What management said
From the company’s own investor presentation. Each point is checked against the source document before it appears here.
This quarter
- International operations commenced at Pier C of Terminal 3 at Delhi Airport.
- Vizag Bhogapuram Airport began commercial operations on 17 August 2026.
Guidance & outlook
- The company is focused on premiumization and margin expansion.
- The company intends to further optimize its cost of debt.
Expansion
- DIAL is developing Aerocity One, a commercial office building with approximately 1 million square feet of built-up area, for handover within FY27.
- DIAL is developing a build-to-suit Taj terminal hotel with approximately 380 keys and 0.6 million square feet of built-up area.
- The Taj terminal hotel is expected to commence partial operations in Q4FY27.
- GHIAL is developing the GMR Interchange retail project with approximately 0.77 million square feet of built-up area.
- Vizag airport's 152-key Vivanta hotel is scheduled for Phase 1 handover in Q3FY27 and Phase 2 handover in Q4FY27.
New orders
- All major non-aero concessions at Vizag Bhogapuram Airport were awarded through competitive bidding.
New products
- Mopa airport opened new stores, including Krishna Pearls and Jewellers and Big Mishra for food and beverages.
Competition
- Mopa airport captured approximately 42% of Goa system traffic during April-September 2026.
What to watch
- Whether operating margin holds above 36.03% after three consecutive quarterly declines.
- Whether interest expense moderates from Rs 992.70 cr as management works on cost-of-debt optimisation.
- Whether other income remains below its 107.65% share of pre-tax profit.