GMR Airports' margin drops 5.90 points sequentially despite 37.54% YoY growth
Costs rose 8.72% QoQ while revenue fell 1.40%; a negative tax rate and other income equal to 85.88% of PBT lifted reported profit.
Filed 27 May 2026, 22:05 IST · after market close · GMR Airports Ltd (GMRAIRPORT)
Key takeaways
- Consolidated operating margin fell 5.90 percentage points QoQ to 36.68% as expenses rose 8.72% while revenue declined 1.40%.
- Revenue grew 37.54% YoY and operating margin improved 1.43 percentage points, but other income accounted for 85.88% of pre-tax profit.
- The stock rose 2.59% on the results day, close to its 2.35% median absolute post-results move across eight prior quarters.
Price around the results
Sequential margin reset after Q3FY26 peak
GMR Airports reported consolidated revenue growth of 37.54% YoY, as revenue expanded faster than expenses, which grew 34.49%; operating margin therefore improved 1.43 percentage points. Sequentially, revenue declined 1.40% while expenses rose 8.72%, causing operating profit to fall 15.05% and margin to narrow 5.90 percentage points. The result reverses the margin improvement from 35.25% in Q4FY25 to 42.58% in Q3FY26.
Reported profit was aided by tax and other income
Other income contributed 85.88% of pre-tax profit, making it a significant part of the quarter's earnings mix. The tax rate moved down 61.68 percentage points QoQ to -32.48%, so the tax credit also lifted net profit relative to pre-tax profit. Interest rose 3.60% QoQ, partly offsetting the 2.69% decline in depreciation.
Margin stayed above the Services peer median
The 36.68% operating margin was 5.53 percentage points above the 31.15% median for the 12 Services-sector peers that had reported the quarter. The multi-quarter trend had been positive from 35.25% in Q4FY25 through 42.58% in Q3FY26, but Q4FY26 brought a sharp sequential decline rather than a third consecutive improvement.
Passenger growth was modest, with capacity projects progressing
Management said GMR Airports' owned airports handled 31.7 million passengers in Q4FY26, up 0.7% YoY, while international passenger traffic fell 1.6%; it cited changing airspace conditions, isolated aviation incidents and temporary airline schedule changes. The company said the first phase of its Bidar expansion is planned to raise capacity to 4 million passengers, while Crete Airport construction had reached approximately 69% completion as of 31 March 2026. Management also said Pier C at Delhi Terminal 3 increased annual international passenger capacity by 50% to 32 million, and duty-free sales began at the Delhi and Hyderabad international lounges in January 2026.
Initial market reaction was close to the stock's norm
The results were filed after market close, and the stock rose 2.59% on the reaction day, after opening with a 4.25% gap. Its 2.35% median absolute move after the previous eight results makes the closing reaction broadly ordinary, although the stock was up 4.28% after five sessions and 11.23% after 15 sessions.
Q4FY26 at a glance
Consolidated figures as filed with NSE — cross-checked against an independent source.
| Line item | Q4FY26 | Q3FY26 | QoQ | YoY |
|---|---|---|---|---|
| Revenue | ₹3,938 cr | ₹3,994 cr | -1.40% | +37.54% |
| Other income | ₹260 cr | ₹-73 cr | — | +7.59% |
| Expenses | ₹2,493 cr | ₹2,293 cr | +8.72% | +34.49% |
| Operating profit | ₹1,445 cr | ₹1,701 cr | -15.05% | +43.13% |
| Operating margin (%) | 36.68% | 42.58% | — | — |
| Interest | ₹950 cr | ₹917 cr | +3.60% | -0.55% |
| Depreciation | ₹452 cr | ₹465 cr | -2.69% | -7.98% |
| Profit before tax | ₹302 cr | ₹246 cr | +23.05% | — |
| Tax | ₹-98 cr | ₹72 cr | — | — |
| Net profit | ₹400 cr | ₹174 cr | +130.22% | — |
| EPS (₹) | ₹0.29 | ₹0.12 | +141.67% | — |
Operating margin of 36.68% compares with a Services sector median of 31.15% across 12 peers that have reported Q4FY26.
How the stock reacted
| Window | Stock | vs NIFTY |
|---|---|---|
| Results day | +2.59% | +4.09% |
| Next session | -0.80% | — |
| 5 sessions | +4.28% | +6.54% |
| 15 sessions | +11.23% | — |
| 30 sessions | +17.21% | — |
Volume on the results session was 8.79× its 20-day average.
What management said
From the company’s own investor presentation. Each point is checked against the source document before it appears here.
This quarter
- GAL-owned airports handled 31.7 million passengers in Q4FY26, up 0.7% year on year.
- Delhi Airport handled its highest-ever passenger ATMs in Q4FY26 and FY26.
Expansion
- The first phase of the Bidar expansion is planned to increase capacity to 4 million passengers.
- Crete Airport construction was progressing as scheduled and had reached approximately 69% completion by 31 March 2026.
- Converting Pier C at Terminal 3 increased Delhi Airport's annual international passenger capacity by 50% to 32 million.
New orders
- GAL was awarded the Delhi Airport Cargo Terminal 1 concession to upgrade, finance, operate, manage and maintain it.
- GAL won major commercial contracts for Bhogapuram Airport that will be operationalized along with the airport's COD.
New initiatives
- Duty Free sales commenced at the international lounges at both Delhi and Hyderabad in January 2026.
Competition
- GAL's Indian airports handled 27% of total Indian passenger traffic in FY26.
- GMR Airports describes itself as the second-largest private airport operator globally by CY2025 passengers.
Problems & risks
- The company cited evolving airspace conditions, isolated aviation incidents and temporary airline schedule adjustments as challenges.
- International passenger traffic fell 1.6% year on year in Q4FY26.
What to watch
- Whether operating margin stays at or above 36.68% after the 5.90-point QoQ decline.
- Whether expenses continue to grow faster than revenue after the QoQ gap of 8.72% versus -1.40%.
- Whether other income's contribution to pre-tax profit remains near 85.88%.