GMR Airports Limited (GMRAIRPORT) Earnings Call Transcript & Summary

Thank you, [ Rayan ], and good evening, everyone. I welcome our shareholders, analysts and other stakeholders to our quarterly 4 fiscal '25 earnings call. The past few weeks have been very challenging for our entire nation, and we need to be mindful of the environment as we navigate the coming quarter. Minor turbulence is part of the journey, but our view about the long term remains intact. Boeing Company forecasts India's air traffic to grow over 7.9% annually through 2043. Indian and South Asian airlines will add over 2,800 commercial aircraft to their fleet by 2043, of which 90% will come from the Indian airlines. Echoing the sentiment, Netherlands' flag carrier, KLM is expanding its operations by starting flights to Hyderabad in September. Malaysian Airlines also affirmed that the Indian market has emerged as a cornerstone for Malaysia Airlines, ranking among the largest and fastest-growing markets in its network, expecting a 14% growth in its passenger traffic flow to and from India in 2025. Efforts are also underway to establish India as a global transit hub. Air India's Via campaign aims to attract foreign travelers by offering enhanced connectivity between the U.K., Europe, Australia and Southeast Asia through India, with connection times reduced to about 2.5 hours. Many of these connections will be serviced by Delhi Airport, which also serves as IndiGo Airlines largest base with 250 daily departures. Airports operated by GMR continue to receive multiple rewards and recognitions globally, showcasing how we consistently improve our services while adapting to changes. Delhi Airport, which is the ninth busiest airport in the world as per ACI, was awarded the Best Airport in India and South Asia by Skytrax, with its global ranking improving to 32 in 2025 from 36 in 2024. Skytrax also awarded Hyderabad with the best airport staff in India and South Asia for the fourth time with global rank improving to 56 in 2025 from 61 in 2024. While Goa Airport's rank improved to 80 from 92. Delhi and Hyderabad Airports have also been winning the ACI ASQ award for the Best Airport in Asia Pacific with the respective passenger categories for multiple consecutive years. On that note, let me now delve into our Q4 '25 performance. Momentum in total income continued with quarter 4 fiscal '25 at INR 29.8 billion, up 16% year-on-year, driven by traffic and growth in non-aero revenues, translating to an EBITDA growth of 19% year-on-year with INR 11.2 billion. For fiscal '25, the total income was up 18% year-on-year to INR 108 billion, and EBITDA increased 22.5% year-on-year to INR 42 billion. EBITDA margin for the quarter was 51% in quarter 4 fiscal '25 versus 48% in quarter 4 '24. Loss from continuing operations for the quarter was INR 2.9 billion versus loss of INR 2.1 billion in Q4 '24, while that for fiscal year '25 was a loss of INR 8.2 billion, almost unchanged year-on-year. This is despite a 27% increase in interest expenses for fiscal '25 and 30% increase in depreciation, both resulting from capitalization of our expansion CapEx already incurred. Had the final tariff for Delhi Airport be issued by midyear, our results would have been substantially better. Looking ahead, given the expected traffic increase and tariff revision, our position will only improve from here. Consolidated net debt, excluding the FCCBs of INR 24 billion, which are deep in money, stood at INR 315 billion, increasing by INR 18 billion versus quarter 3 fiscal '25. GAL had raised INR 15 billion in the form of 3-year nonconvertible bonds, primarily to purchase the 10% equity stake in Delhi Airport from Fraport, while Bhogapuram availed a subordinated debt facility of INR 3.5 billion for its greenfield project, which is already at an advanced stage of completion. On the operational front, traffic continues to grow 9% year-on-year and 1% Q-on-Q growth in Q4 fiscal '25, reaching 31.5 million passengers. This is a number which excludes Cebu. Domestic passenger traffic grew 9% year-on-year, while international traffic grew 11% year-on-year in quarter 4 '25. International passenger traffic share for the quarter was 25%. Fiscal '25 passenger traffic increased 9% year-on-year to 120.5 million for the group. With respect to specific airports, during quarter 4 fiscal year '25, passenger traffic at Delhi rose 7.5% year-on-year to 20.6 million and rose 7.6% year-on-year to 79.3 million for the full fiscal year '25. At Hyderabad, traffic was up 21% year-on-year to 7.8 million for quarter 4 fiscal '25 and up 18% year-on-year to 29.5 million for fiscal year '25. Both these airports handled the highest quarterly passengers in quarter 4 fiscal '25. Goa traffic for the quarter declined 5% year-on-year to 1.27 million passengers. Our international passengers more than doubled versus last year. For Goa in fiscal '25, traffic rose 7% year-on-year to [ 4.7 million passengers ]. As new aircraft deliveries gather pace, we expect strong growth in international traffic and there is latent demand for international travel. Total income of Delhi Airport rose 24% year-on-year. to INR 16.4 billion, driven by traffic growth, increase in non-aero income as well as income from commercial property development with EBITDA increasing 42% year-on-year to INR 5.3 billion. At Hyderabad, total income was INR 5.9 billion, up 7% year-on-year with traffic driving this growth. EBITDA was up 9% year-on-year to INR 3.6 billion. Mopa on Goa Airport reported a total income of INR 1,201 million, almost unchanged year-on-year as quarter 4 fiscal '24 had some CPD income arising from signing hotel agreements. The airport continues to report positive EBITDA in its initial years of operation with quarter 4 fiscal '25 at INR 253 million despite a full quarter impact of revenue share kicking in. Notable achievements during the quarter are: non-aero revenue at all our airports was stronger in the quarter. Combined non-aero revenues at Delhi, Hyderabad and Goa Airports rose 13% year-on-year, both in quarter 4 and for the full fiscal year '25. Duty-free SPP at Delhi increased to INR 1,010 in fiscal '25 from INR 997 in fiscal '24, while Hyderabad SPP was INR 727 in fiscal '25, up from INR 683 in fiscal '24. The traffic order for control period 4 for Delhi Airport was issued by ERA and new tariffs have been effective from 16th April 2025. With this, the Aero yield per pax or YPP, should now be close to INR 360 versus INR 145 prior to the order. This also should have -- should drive a significant improvement in Aero revenue, overall profitability and cash flow generation at Delhi Airport during the current fiscal year. The share purchase agreement with Fraport towards the acquisition of Fraport's minority 10% equity stake in Delhi was concluded in the quarter, thereby increasing GHAL's stake in Delhi to 74% from earlier 64%. This was done at a deep discount to what the analysts have been valuing Delhi Airport. Moving forward in its strategy towards consolidation of stakes in existing assets, Hyderabad Airport entered into a share purchase agreement to acquire 70% stake in ESR GMR Logistics Park Private Limited from other shareholders at a consideration of INR 413 million. The airport's wholly owned subsidiary, Hyderabad Aerotropolis Limited already holds 30% stake in EGLPPL. And with this transaction, EGLPPL will become a wholly owned subsidiary of the airport. Progress on developing the airport adjacency business continues. We are steadfast in long-term strategy of converting GHAL into a consumer business with the underpinnings of a utility company. GAL will start operating the Delhi duty-free concession from July '25 and will also take over the operations of duty-free at Hyderabad Airport in quarter 2 of fiscal '26. Very recently, GAL has been granted a concession to operate, maintain and manage the existing cargo terminal at Delhi Airport on similar terms to ensure continuity of operations post the termination of security clearance of one of the cargo operators, resulting in cancellation of that concession. Overnight, GAL had to take over this concession, thereby ensuring seamless transition and no disruption of services to customers. Construction of multiple airport land development projects are underway at all airports. As of March at Bhogapuram, 69% of physical progress is completed, and we expect the airport construction to be completed by December 2026. At Crete, 48% has been achieved with our target completion date being February of '27. Credit ratings of Delhi Airport were upgraded by Standard & Poor's to BB from BB-, by Fitch to BB+ from BB- and by ICRA to AA from AA-. The expected improvement in financials in fiscal '26 will further improve in ratings and costs further. At Hyderabad 2, Moody's upgraded their credit ratings from Ba1 to Ba2. At GMR, we firmly believe that integrating ESG principles is crucial for airport operators to build resilient operations, mitigate risks and secure a license to grow within evolving regulatory and community expectations. Delhi Airport released its sustainability report 2024, a comprehensive disclosure that sets a new benchmark for climate action, innovation and social impact in the Indian aviation industry. The report outlines airport's transformational journey in embedding sustainability to the heart of its operations, making not just India -- India's busiest airport, but also its greenest. Key highlights of the report are: became -- Delhi Airport became Asia's first Level 5 carbon accredited airport in over 40 million passengers per annum category. Delhi Airport continues to operate entirely on net renewable energy. Over the last 4 years, the airport achieved a 52% absolute reduction in carbon dioxide emissions and a 36% in carbon dioxide emissions per passenger. Infrastructure projects like Eastern Cross Taxiway and deployment of Taxibots and 22 new bridge-mounted equipment have dramatically cut aircraft taxing time, fuel usage and greenhouse gas emissions. Delhi Airport is on track to become a water-positive airport. Through the GMR Varalakshmi Foundation, Delhi Airport is actively uplifting the underprivileged communities across the national capital region. It recently implemented a Hidden Disability Sunflower Program, making Indra Gandhi International Airport a sunflower-friendly airport with personalized support for persons with nonvisible disabilities. The report is available on Delhi Airport's website, and I would encourage you to read the report to appreciate Delhi Airport's initiatives and actions on the ESG front. Hyderabad Airport achieved a Level 5 carbon accreditation under the globally recognized Airport Carbon Accreditation or ACA program, placing the airport among the top 4 airports in ACI, Asia Pacific and Middle East region. Goa Airport won Build India Infra Awards in 2025 for sustainability and civil aviation sector. Our IR presentation with all the financial numbers are already available with you. If not, you can download it from our Investor Relations section of our website. We are available to respond to your questions on this call and offline after the call. Now I would like to open the forum for queries that can be addressed by my colleagues from the corporate and the business teams. Thank you so much.

My first question is, sir, can you please explain the impact of Delhi tariff order expected on the annual revenues of the DIAL.

Mohit, we don't give forward guidances on revenues. Obviously, the new tariff -- so the new tariff order, we can talk specifics on that aspect of it, Sidharath, why don't you?

Yes. The current -- the tariff was INR 145 yield per pax. Now the revised tariff, which is now implemented from 16th April 2025 is INR 360 yield per pax. That means there is an increase of INR 215 yield per pax. So basically you can do the calculation. If it is 80 million passengers, it is about INR 1,600 crores [indiscernible].

Understood, sir. My second question is on this depreciation interest. Of course, the interest has seen a sharp increase Y-o-Y and Q-o-Q. Is this INR 9 billion number, quarterly number, is this a number -- INR 9 billion or 10 billion number, that's the number which we should work with for the FY '26? Is a fair assumption?

Increase in the interest cost and depreciation on capitalization, which has been completed last year, this is on a yearly basis. This will be more or less the final depreciation and interest cost.

Is there scope for reduction in the interest cost as we go forward? This number looks to be sitting at higher side.

So there will be some reduction in interest cost because in case of the Delhi, there is one-off about INR 80 crores of charge because of the cancellation of the hedges, and that will not be there going forward. Further, since we have refinanced nearly INR 2,500 crores in case of Delhi, about 12% rate of interest to 95%. So there will be some more savings. So going forward, there will be some reduction in case of the interest cost.

Three questions from my side. The first one is on Delhi Airport. If we look at the CPD rentals this quarter...

Can you speak -- sorry, can you come closer to the mic, please? We can't hear you very well. There's a little disturbance also now in the...

Sir, how is this one, sir? Is this any better?

This is much better. Much better, much better.

Okay. Excellent. I have 3 questions. The first question is, if I were to look at our CPD rental income for Delhi Airport, against a run rate of about INR 200 crores for several quarters. This quarter, we have seen a sizable bump up to about INR 383 crores. What would -- what has actually driven that? And what is a steady-state kind of CPD rental that we can actually expect going forward?

Okay. This quarter, one of the assets which has been leased out in case of the CPD land, now all the CPs have been completed. Hence, Ind AS 116 lease financing has kicked in. So we have equalized all the MMGs, which have been receivable over a period of next 46 years. As a result, there is a bump of about INR 188 crores to INR 190 crores this quarter. And going forward on a yearly basis, there will be an increase to the extent of about INR 120 crores going forward.

Okay. So from here on, the steady state should be somewhere about INR 3 billion to INR 3.2 billion per quarter, right?

No, no. INR 120 crores increase going forward on a yearly basis.

Okay. So INR 1.2 billion increase on a yearly basis. Okay. Great. My second question, sir, is now the FY '26 will see the first year of the full effect of the new YPP. So I don't mean it in the form of a guidance. But if I were to just do a basic math of keeping all other things equal, our Aero revenues will now more than double. And if I keep our interest, depreciation, everything constant, is it reasonable to assume that FY '26 Delhi Airport should be able to break even?

I think that would again allude to guidance. I really don't want to give that forecast to you. But there is a significant improvement. If you look at the Delhi duty-free -- the Delhi Airports P&L. And if you impute the numbers that you're articulating, I think the results will be quite obvious over there.

Okay. Great. My last question, sir, is on Hyderabad Airport. What we have seen is this quarter, there has been a sequential softness in the EBITDA margins for the Hyderabad Airport. And the effective tax rate this quarter has also been very high, almost about 44%, 45%. So could you please clarify what led to the sequential softness and also the effective tax rate?

Just one question. Just 1 minute, please. Karthik, if you adjust this with respect to other income, you will see an improvement in EBITDA margin is mainly because in Q4, the other income is lower compared to Q3. That's the main reason.

Okay. Because even if I adjust the other income, even if I exclude it, there seems to be a reduction. So that was why I was curious to see whether there was anything else apart from other income?

No, there could be some year-end expenses.

Year-end expenses have been booked, some of the expenses, which have come around INR 10 crores extra, which has been accounted for. And as far as the tax is concerned, it is only in a book entry, and we actually take MAT credit back into the books. Hyderabad Airport is not paying any taxes as of now.

Got it. So which means the steady-state tax rate, I mean, it's not paying any taxes, but the steady-state tax rate should continue to be about 33%, 34% then, right?

No, no. This is actually what we have accounted for is only a MAT. It is not full tax. We are under MAT because we have a carryforward losses available under income tax.

Okay. Excellent. Just one follow-up, sir, if I may. So your earlier -- the comments that you made at the beginning that the economic environment has been a bit volatile in the first 2 months because of the developments recently. Has that had any impact on your volumes or your forward bookings in the short term? And if yes, how long do you expect that to last, whether it is in Delhi or in Hyderabad?

Basically, you're talking about the...

Pakistan -- India, Pakistan and the impact on the traffic. So honestly, it's a very minimal impact on traffic. It was only certain airports. North India to be shut down during those operations during those 7, 10 days, minimal impact given the size of operations at Delhi. Hyderabad, almost no impact. And now we see a comeback even in those sections.

I have a few questions. Firstly, on RE CPD income jump. So we are implying that our annual CPD income at Delhi will jump from around INR 800-odd crores to INR 920 crores, INR 930-odd crores going forward annually. Is the right assessment? Also a related question, what is the time line of other RE projects which are going to commission, including Bharti Realty starting to give you these rental and other projects, including the destination mall, which we are building in that location?

Yes. Prateek, I have here Aman Kapoor, who heads our CPD business over here. So he will guide you on developments in that business.

Yes. So with respect to Bharti, I think the first phase of the 5 million square feet FAR that was granted, the almost 55% [indiscernible] of the will get ready and commissioned by third quarter of this calendar year. That has no impact on revenues per DIAL because there is no revenue share and the fixed land rentals are continuing to be paid. So it has no necessarily an economic impact. With respect to the shopping center, it is expected in first quarter of 2028 to start operations. The -- from this financial year onwards, the minimum guaranteed rent has kicked in, and that will continue to be paid irrespective of whether the project is completed or not.

So that's what the straight lining, which G.R.K. Babu had highlighted, explained earlier.

And the Bharti Phase 2 is -- when is that supposed to come in picture in terms of rental contribution to the company, DIAL?

Well, they have a right to choose up until end of FY -- I think it's the year 2027, they have a right to exercise that option.

So from FY '28 onwards, we should probably fill that number?

Yes. If they exercise that option.

Correct. then the rentals will start kicking.

My other question was regarding Delhi Duty Free. We have given this data on annual numbers for the big entities, duty-free, cargo, et cetera. That shows that EBITDA and PAT for the financial year '25 at INR 340 crores and INR 205 crores. That seems to be suggest a very small growth year-on-year, like basically compression of margins and like almost a decline in PAT, while the top line seems to be growing well. Why that?

Yes. This is basically, if you look at it '23, '24 financial year compared to '24 '25, you are looking at it. In '23-'24 financial year, FY '24 ending, the duty-free was getting the refund of ITC on both arrival and departure stores. So they got a benefit of about INR 50 crores to INR 60 crores. Whereas the government has withdrawn on arrival store and they are allowing only on departure stores, the ITC credit going forward from October 2023 onwards. As a result, if you compare '24 versus '25, even though turnover has gone up because of that ITC credit not available in '24, '25, it has come down.

So it's just a 4%.

So it's a sustained impact. So is this below EBITDA or above EBITDA line item?

That was above EBITDA line item.

Okay. So your top line has grown 14%, EBITDA has grown 3% and PAT has actually declined by around 10% in FY '25 in this segment. So that's why the question was there. So I'm not sure if this completely explained. So there are like line item below EBITDA also, which explains the PAT performance.

Below EBITDA, there are no issues. So below EBITDA is basically the last year profit versus this year profit. Profit has come down mainly because of the ITC refunds, which they used to get. They used to book less cost in '23, '24, whereas 100% cost has been accounted for in '24, '25. That is the reason why at EBITDA level, it has come down compared to '24 to '25. And going forward, that will be defined.

Yes. So Prateek, your EBITDA margins in your duty-free business will be about 15% to 17%, going forward. Taking into account this onetime adjustment of withdrawal order from the government. This was as against a 20% EBITDA margin earlier. So from your modeling perspective, you should assume about 17% EBITDA margin.

Sure. And lastly, on net debt has like now touched INR 31,400 crores in this quarter. How do you see net debt in FY '26 from here? And what is the CapEx expectation in FY '26 for the overall operation?

There will be addition because the Bhogapuram construction is happening. If you look at it in the INR 31,000 crores, Bhogapuram is accounted for only INR 1,400 crores, INR 1,500 crores. So we will be drawing additional INR 1,700 crores in this '25-'26. So to that extent, the debt can go up. Further, and GAL level also, we have raised INR 400 crores in April, and we may likely to raise another INR 200 crores, INR 300 crores in this financial year. So about INR 700 crores also GAL level go up. So total about INR 1,700 crores plus INR 700 crores, INR 2,400 crores can go up.

This is the gross debt, but net debt because your EBITDA cash accruals have also increased significantly because of tariff benefits in DIAL. So net debt can continue to go up or like that may have peaked in FY '25 end?

So net debt will also go up slightly, but not as much as the gross bill because of the cash accruals because of the enhanced tariff that we have now in place. DIAL will throw a good amount of cash because of implementation of the tariffs. So that cash accrual will be there. Gross debt may go up by around INR 2,500 crores, but net debt may not go up that much.

I have 2, if I may. One is on the Noida Airport, Delhi. It should open in the next few months. So do you see -- are you seeing any impact on airline scheduled capacity for the new Delhi Airport? And question number 2 is on actually Groupe ADP. As you know their CEO has changed at the beginning of the year. And on the full year results call, the CEO mentioned that one of the pillars of its strategy is to get basically dividends from international assets, including GMR Airports. However, you also mentioned previously that there is a lot of opportunity to invest in India. So within this context, when do you think that GMR Airports will pay dividends?

Yes. So on Jewar, honestly speaking, the opening of that airport is quite complementary to our Delhi Airport. Delhi Airport, as you know, we have expanded our capacity to about 100 million passengers. And there will be some -- we would actually encourage some of the low-yielding traffic. And when I say low-yielding traffic is the ATRs and some domestic traffic, which does not spend too much at my airport to move over the next 3 to 4 years. It's not going to happen immediately, but next 3 to 4 years is what we expect that to happen, which is beneficial because my international airport -- international traffic is growing quite robustly, and that will release the capacity at the airport for -- on the air side of it for the aircraft movements. So it's very complementary for us that Jewar will open. The market itself is growing almost 8% to 10% every year. There is enough for everybody. From a comparative -- competitive scenario, Jewar Airport is almost 70, 80 kilometers from [ Central Delhi ]. [Technical Difficulty]

Yes. So I think to answer the question on Noida, you were mentioning that Jewar Noida Airport is 70 to 80 kilometers away, I guess, from the Central Delhi.

Yes. So purely from a distance perspective, it doesn't serve the main Delhi and Gurgaon clientele. Even Noida clientele, it doesn't service. It does service the Greater Noida and the catchment area for that is mostly Agra and Aligarh areas, which are from an economic standpoint, a notch lower than the high-yielding passenger traffic that we have from Delhi, Gurgaon and also other northern parts of India. So we expect that as time goes by and over the next 2 to 3 years, as our traffic also starts to -- or capacity starts to reach about 100 million passengers, we expect some of the low-yielding passengers to continue to move from Delhi Airport, and we concentrate on the high-yielding passengers, which are usually the international traffic of full-service airlines. So that's the strategy. In a nutshell, Jewar is very complementary to our business model. And as we go forward, we will continue to work with airlines to facilitate their slots over here at Delhi Airport. I just want to highlight one aspect that airlines don't give up slots. They -- once they get hold of slots, they hold them very, very dearly. But yes, on the low-yielding ones, we would encourage these airlines to move to Jewar. On ADP, sorry? On ADP, I just want to again highlight, Philippe Pascal has taken over as the Chairman and Managing Director of ADP. Philippe was the CFO when we did the transaction in 2020. And he was one of the persons who negotiated with us. He fully understands the spirit behind their investment in GMR Airports. And so we have a very strong relationship with the current senior management. Many of them have also worked for a brief period of time at GMR Airports here in New Delhi. So from a transition perspective, we don't expect any turbulence. There's total alignment of strategy and objectives between Groupe ADP and GMR as far as the GMR Airports business is concerned. With respect to dividend outlook, we have always highlighted that we should be achieving on a consolidated level at GAL, a free cash -- FCFE positive status by fiscal '28. And the prerogative of giving dividend, of course, is with the Board of Directors. I really can't speak for them. All I can highlight to you is that purely from a cash flow perspective, going forward from fiscal '28, GAL would be in a position to give dividends as it goes forward. So we will, of course, guide the markets as we reach that milestone. But that's what our thought process is that GAL should be a dividend-paying entity for its shareholders. As you would have seen during last fiscal year, Hyderabad Airport has already declared 2 dividends, which have come to GAL. With the new tariff order, Delhi should also start giving dividends after 3 years. And hence, we believe that also by that time, the transition of the non-aero businesses into GAL would be mature enough. So enough cash flow generation would have happened at -- would have started to happen at GAL facilitating any outflow of dividends from fiscal '28 onwards. That's my guidance.

So my first question is now since the cancellation of the Celebrity Delhi, who is managing it? Is it DIAL or is it GAL? And what are the revenues and PAT for -- what are the revenues and PAT for FY '25? And what can we expect for FY '26?

Yes. So this is being managed by GAL now. in terms of concession being taken over by again. And in terms of the revenues for FY '25, they clocked about INR 780 crores and a PAT of INR 120 crores -- for FY '26 this will be a forward-looking number. So maybe I'll not talk about that, but you can assume reasonable growth over the numbers what I just told you.

And the Delhi Duty Free, so the revenues and PAT for FY '25, if I missed it if you mentioned Mr. [indiscernible].

Delhi duty free FY '25 clocked revenue of INR 2,200 crores with a PAT of about INR 210 crores.

And lastly, just the Hyderabad airport duty-free, has that moved from GMR Hospitality and retail to GAL?

It will -- yes, it started moving into the GAL. And full-fledged operations will be started by GAL from July '25.

My first question relates to the growth we've seen in recent months at the Delhi Airport. It started becoming more like a 6% kind of trend. Could you give us a sense why growth appears to be kind of slowing down in these months in March and April? Because I would want to assume that like Hyderabad, capacity won't be expanding. And could you give us a sense of how to kind of then think through there was growth happening in Delhi?

The Delhi, I think March has clocked very well. And April. Since the base is very high, the Delhi always growth is between 5% to 6%, maximum 7%. When it comes to Hyderabad, the base is very low, which is about 24 million, it has achieved 29 million, the growth is 17%. And as far as the capacity is concerned, Hyderabad has been built for 34 million capacity, and it has closed with 29 million this financial year. Next year, we are expecting to do that about 32 million to 3 million.

Understood. So essentially, Delhi should be on this stable 5%, 6% growth pattern from here on, given the high...

7% to 8% is the growth you can assume at Delhi Airport, given the fact that today, we are doing almost 80 million passengers. The base is so high.

Yes. So it's not a capacity issue right now, right? It's just the way the is panning out in recent months and things slightly better. I think that's...

No, no. Also, Aditya, capacity is already gone. The airside capacity is fully completed. It's actually -- we don't have to put in any CapEx to increase the airside capacity. The airside capacity will only now increase due to technological improvements for better ATM management, okay? It can go up to almost 140 million there, okay? But for that, you have to continuously work with the regulator, which is DGCA to improve the software and other equipment over there. On the city side is where we have 100 million terminal capacity as on date. We can sweat these assets to take it to about 120 million. And if we reach that level, it's good news for all of us. And if we need to put some CapEx to further enhance the terminal to balance the capacity, we will do it at that point of time. So now it's only a question of passenger throughput. And for that, the best guidance you will get, at least in the listed space is from IndiGo. And I think I read today, there were some news reports of IndiGo that almost 80 aircrafts, which were grounded are coming back over the next 6 months with their Pratt & Whitney engine issues getting resolved. So as the aircraft supply increases, the supply side will get debottlenecked. And obviously, Delhi being almost 30% to 40% market share in India, that will also flow through Delhi. And last but not the least, we will have a positive impact on fares, which will again put some tailwind on the demand for flying.

Understood. That clarifies. The second question that I had was that, again, trying to kind of pick your brains up. You said 13% is the non-aero growth for the 3 aggregate assets in the fiscal and about, I think, 10-ish percent is the growth in tax count. So it's about 1.3x that is happening in terms of growth and obviously, inflation insights. It doesn't seem as if beyond inflation, any other meaningful factors that should be driving that performance, penetration, premiumization, so on and so forth is helping us right now. How soon should we be expecting more than a kind of a 3% differential in non-aero revenue growth versus the tax growth for the 3 assets that we have.

Yes. So Aditya, if you would have seen even in the past, our growth of SPP, which is growth over the normal traffic growth has been in the range of about 5%. And that is like with the available space and all that. As we go forward, and you would have seen in case of Hyderabad airport duty-free business, the SPP growth has been significant. This was with the expanded area with the new offerings. So our focus is on 3 counts: One, how do you get more space to cater to the additional offerings? That's one. Within our given space, how do you bring in premiumization? So what we are doing is like in Hyderabad, we are bringing in wish to luxury -- to luxury segment as part of our retail offering. Similarly, on the F&B side, we are bringing in Michelin Star restaurants. So those are the steps which are being taken to bring in premiumization of the offerings, more space and also basically bringing in the differential product offerings here. So I think that's something which is now the focus and which will be driving our further growth beyond what you generally call it as a indo rate of growth for SPP.

Also, Aditya, I think you need to take into account as the concession of the previous concessionaire was ending. Obviously, the focus was more on the transitioning aspect rather than on the growth aspect of it. As it comes back to GMR Airport fold, full efforts will be there to put the necessary investments, both from area space perspective, brand perspective to take it to a different level.

Understood. Third question that I had was on the part beyond the 3 airports in terms of revenues and EBITDA. And thank you so much for providing color in the presentation to the extent that you have very helpful. The way I see through it, the additional EBITDA the 3 assets is coming in from 2 buckets, one of which is very clear, the subsidiaries of yours, [indiscernible] the hotel, the duty free in Hyderabad, parking in Delhi. The other half is being clubbed up inside GAL stand-alone as an EBITDA. And by the way, this is a fairly high EBITDA margin business that is getting clubbed up. Could you give us a sense of this bucket and what is -- what are the key drivers? I mean how should we be thinking through growth in this fairly large EBITDA item, which is got clubbed up for now? Clarity would be useful.

Basically, in case of GAL, the revenues are -- we call it put it in 3 buckets. One is basically the management fee and operator fee, which we collect -- the second one is the interest income. The third one is adjacency business non-aero, basically 3 verticals -- 4 verticals. One is the retail, other one is the cargo, third one is the car park and fourth one is the duty-free. So now all those things have started showing in this current financial year in GAL, which are likely to grow substantially going forward, especially duty-free, where we are taking over the Delhi as well as Hyderabad duty-free, which will start operating from July 2025 onwards. So in nutshell, I think what G.R.K Babu was highlighting to you, Aditya, is that this is mostly management fee, dividend earned from Hyderabad and interest earned from loans extended to its subsidiaries. That's the component that today that bar represents. But as the transition happens of the non-aero businesses, this component as relative to the growth of the other component will slowly come down and operating income will substantially go. So operating income in the FY '26 can go as much as more than INR 3,200 crores.

From the existing INR 800 crores, INR 900 crores that is there maybe in this bucket at this point of time. Now I just wanted to kind of clarify, will you be adding in the next year Delhi Duty Free to GAL as in Delhi cargo...

From July onwards, Aditya -- Yes, that's correct.

Delhi Duty Free, Hyderabad Duty Free, both will be operated by GAL from July -- 25th to July 2025. That's what I said, this current financial GAL has closed with a turnover of about INR 1,100, INR 1,200 crores with EBITDA about INR 600 crores, which will substantially go up in the next financial year because of adding of the duty-free business and EBITDA also is substantial.

And in this guidance, are you also counting in Delhi Cargo and the Hyderabad warehousing venture aggregate stake? Will they be over and above INR 1,200 crores?

Sorry to intervene. There are a few other participants also in the queue. I would request if you can come again in the queue.

I just have one question to a comment that you had made earlier that you expect the gross debt to still go up by about INR 24 billion, split between Bhogapuram, which would be another INR 17 billion and another INR 6 billion to INR 7 billion at the holding company level. So am I correct in -- factually?

Yes, correct.

Okay. So just one question on that. Number one is Bhogapuram is already 69% complete. In other words, almost more than 2/3 complete. And if I look at the net debt on Bhogapuram, it's already about INR 17 billion. But if we are borrowing another INR 17 billion, it's almost doubling the borrowing there for an additional 30%. So how do I reconcile that?

No, the physical progress we are showing, but the billing has not happened from the contractors. So we continue to pay them as and when the bills have been received. There will be always a lag to the extent of INR 300 crores to INR 400 crores in payment. It is not because we don't have the money because they take more time to submit the bills, number one. Number two, the total debt for Bhogapuram Airport itself is INR 3,215 crores. That means we have raised about INR 1,400 crores, INR 1,500 crores another INR 1,600 crores, INR 1,700 crores we have to rise to complete the project.

Complete and...

Excellent. One last question, sir, on the holding company debt where you're raising another INR 6 billion to INR 7 billion, what would that be employed for?

Basically, about INR 250 crores is the deposit, which we have to give to DIAL for the duty-free business. We also have to make equity investment in case of the Nagpur Airport to the extent about INR 200 crores. And we also have to make another INR 110 crores equity investment in case of Bhogapuram and other small other requirements, all together about [indiscernible].

I have just a couple of questions. Firstly, on -- because of this Pakistan airspace ban and diversion of traffic routes because of that, has there been any instance of some airlines shifting traffic to maybe Mumbai? Or do you foresee that happening? And second question is, which is a different question on regarding new concessions, like government has recently approved a few new greenfield projects at Odisha, Kota and I think Chennai part 2. So how are we looking at these concessions coming up?

So practically, I'll just say that there is no movement of traffic from Delhi to other airports because the airspace having got shut by Pakistan. And now actually, most of the foreign airlines are now operating. They have started to operate through Pakistan Airspace. Indian-owned airlines are not -- or Indian flag airlines are not operating. So there was no movement away from this. So that is one feedback.

On the part of the new Chennai Second Airport and other opportunities. So these are the projects which we look at on the merit of it. And as and when those processes are launched by the government, yes, we definitely have keen interest in all opportunities in India, but it should be value accretive to all the shareholders. So those will be evaluated and considered on the basis of merit.

Again, Prateek, very simply put, my -- today, I'm at about 120 million passengers, growing at about 8% to 10% every year. I want to make money on the investment we have already done. I am under no pressure, obligation for optical reasons to have more airports under my belt. As a preference, we like to put more money to work in greenfield airports. Let's see what the terms and conditions come for these greenfield airports. But we are hungry for returns. We are hungry for dividend, and we will grow our current portfolio to whatever levels of capacity that we have created. So that's the only guidance I would like to give you.

Thank you. Thank you, friends, for joining us on this quarter 4 fiscal '25 and annual results call. I hope we have been able to satisfy all your queries. But in case you have any further questions, the IR team is available offline, both through e-mail questions or by having a call with them. I urge you to contact them and clarify your questions and look forward meeting with you very soon. Thank you so much.