GMR Airports Limited ($GMRAIRPORT)

Ladies and gentlemen, good day, and welcome to GMR Airports Limited Q4 FY '26 Earnings Conference Call. This conference call may contain forward-looking statements about the company, which are based on the beliefs, opinions and expectations of the company as on date of this call. These statements are not the guarantees of future performance and involve risks and uncertainties that are difficult to predict. Please note that this conference is being recorded. I now hand the conference over to Mr. Saurabh Chawla, Executive Director, Finance and Strategy. Thank you, and over to you, Mr. Chawla.

Thank you, and good morning, everyone. I'm pleased to present a resilient set of financial and operational results. However, before turning to the numbers, it is important to acknowledge that the current operating environment continues to be challenging. The global aviation landscape is currently weathering a complex storm. And as a major international airport operator, we remain watchful of the broader macroeconomic and industry dynamics. Ongoing geopolitical conflicts have driven a dramatic spike in jet fuel prices with aviation turbine fuel now consuming 55% to 60% of our airline partners' operating expenses. This volatility, coupled with airspace closures has forced capacity rationalization, including temporary international route suspensions this summer. Consequent fuel surcharges have driven up airfares, causing a temporary slowdown in immediate passenger traffic. However, the ecosystem's response has been highly supportive. To protect the industry's structural health, the government of India and key states have intervened decisively in Delhi and Mumbai, recently slashing VAT on ATF to 7% and Ministry of Civil Aviation has provided direct relief by cutting domestic landing and parking charges by 25%. As an airport operator, our business is built on long-term infrastructure horizons and not single quarter cycles. We must separate transient operational friction from India's secular growth drivers, which remain intact. The structural investment thesis continues to be validated by global authorities. The World Travel and Tourism Council's May 26 research reports, the global travel and tourism sector to outpace the wider economy by 1.5x over the next decade. Within this global backdrop, India remains a primary growth engine, driven by an expanding middle class and irreversible infrastructure momentum. Consumer appetite and fundamental desire to travel have not diminished. The current softening is transitory due to Iran conflict and should not be viewed as a structural decline in demand. As management, our strategy is clear. We are navigating the next 2 quarters with strict discipline, aggressively optimizing our non-aeronautical revenue streams and working closely with airlines to maximize asset utilization. Our long-term strategies remain firmly on track because we are building for the next decade of Indian growth, not just next quarter. On that note, let me delve into our Q4 fiscal '26 performance. Momentum in total income continued with quarter 4 at INR 40.4 billion, up 36% year-on-year and fiscal year '26 at INR 152 billion, up 40% year-on-year. More than 50% of this income has come from non-aero businesses and about 1/3 came from the aero revenue. EBITDA for the quarter grew 38% year-on-year to INR 15.5 billion. And for the full financial year '26, EBITDA reached a record high of INR 61.5 billion, up 47% year-on-year. PAT for the quarter came at INR 4 billion versus loss of INR 2.5 billion in quarter 4 fiscal '25. Importantly, for fiscal '26, reported PAT of INR 472 crores was positive for the first time in over a decade. Consolidated net debt, excluding FCCBs of INR 28.8 billion, which are deep in the money and will convert into equity, stood at INR 340 billion, decreasing by INR 4.7 billion versus quarter 3 fiscal '26. GAL stand-alone net debt decreased by INR 9.4 billion, partially offset by increase of INR 4.2 billion at Bhogapuram. For fiscal '26, net debt to EBITDA stood at 5.5x and is poised to go below 4x in the next 18 to 24 months. And this shall be -- this should be viewed in the backdrop that now we have added Nagpur in the portfolio as the government has finally taken the decision. GAL is currently rated A+ by CRISIL. On the operational front, traffic at GAL-operated airports rose 1% year-on-year in Q4 fiscal '26, reaching 31.7 million passengers. This excludes Cebu. Despite multiple disruptions throughout the year, GAL served a record 121.6 million passengers in fiscal '26. Total income at Delhi Airport rose 23% year-on-year to INR 20.2 billion in quarter 4 and rose 33% year-on-year for the full fiscal '26. Aero revenues rose 161% year-on-year in fiscal '26, driven by implementation of revised traffic tariffs. As a result, EBITDA for quarter 4 was up 42% year-on-year to INR 7.5 billion and increased 64% year-on-year for the full fiscal '26 to a record INR 28.8 billion. With this, the airport has reported a profit of INR 1.2 billion for quarter 4 and INR 4.8 billion for the full fiscal '26. At Hyderabad, total income for quarter 4 was INR 6.2 billion, up 5% year-on-year. And for the full fiscal '26, it was at INR 25.8 billion, up 10% year-on-year. Non-aero revenues were particularly strong in fiscal '26, up 23% year-on-year. EBITDA for quarter 4 was up 2% year-on-year to INR 3.6 billion and was up 9% year-on-year to a record INR 16.1 billion for full fiscal '26. The airport continues to be PAT positive on a quarterly and yearly basis with fiscal year '26 PAT at INR 4.3 billion versus INR 1.9 billion in fiscal '25. Mopa Airport continued its operations with a reported total income of about INR 1.1 billion in Q4, down 5% year-on-year and INR 4.1 billion for the full fiscal '26, down 7% year-on-year. Hero revenue declined 12% year-on-year due to the special incentive program to attract airlines, the impact which is already visible in traffic, which rose 15% year-on-year and non-aero revenues, which saw a 25% year-on-year growth. The airport continues to report positive EBITDA with quarter 4 fiscal '26 at INR 502 million and fiscal '26 at INR 1,273 million. The notable achievements during the quarter are -- combined aero yield per pax or YPT in quarter 4 was INR 434 in Delhi, Hyderabad and Mopa and non-aero income per pax or IPP was INR 640, and this includes all revenues from non-aero businesses adjusted for revenue share paid to airports as well as non-aero revenues reported by Delhi, Hyderabad and Mopa Airports. Momentum for our adjacency business is accelerating and as we advance towards our long-term ambition of building GAL into a scaled consumer platform, firmly supported by the resilience and discipline of our core utility operations. At Delhi, duty-free achieved the highest monthly sales in Jan '26, while at Hyderabad, Highest monthly SPP was reported for March '26. The increased duty-free allowance of INR 75,000 as announced in the last union budget is now implemented. At both these airports, duty-free sales commenced at international lounges. At Hyderabad, GAL operationalized Phase 1 of new larger duty-free store at departures. Moving to cargo. GAL won the Cargo Terminal 1 concession, which is -- which it was already operating, but on an interim basis post the termination of the previous cargo concession. At Bhogapuram, work has already begun operationalizing the non-aero businesses as soon as the commercial operations at the airport commence. At Delhi, PFC in Terminal 3, which was earlier a domestic peer has been converted to international, increasing the terminal's international capacity by 50% to 32 million passengers. And this is in line with our overall strategy to capture as much of international traffic, which is the high-yielding traffic going forward. Operations will commence shortly, and we will enable us to further expand our non-aero offerings to international passengers. Hyderabad Airport commissioned the Cargo Terminal 2, which was initial -- with an initial annual capacity of 50,000 metric tons with a scope of expansion to 100,000 metric tons. The terminal also features a large fully temperature-controlled pharma zone, purpose built for handling pharmaceutical and perishable cargo. Construction on multiple airport land development projects is underway at all airports, details of which are available in the results presentation. Fiscal '27 will see handover of our first self-development commercial building at Delhi Aero City, where the pre-leasing discussions are already underway. And here, I would like to highlight that as articulated many times in the past, like we have built our second platform of business, which is the non-aero business, we are very much focused on building our third platform, which is the real estate development business. The MRO business signed an agreement with Boeing India Boeing India Defense to undertake Phase 56 heavy maintenance checks for the Indian Navy's P8I maritime patrol aircraft fleet, expanding our capabilities into the defense sector. Work on the new airport construction is steadily progressing. At Bhogapuram, 98.7% of physical progress has been achieved as of March '26, and we aim to operationalize the Bhogapuram Airport in quarter 2 of the current year, much ahead of our original target date of December '26. At CRE, 69% progress has been achieved as of March '26. In line with its responsibility as a leading airport operator, JMR Airports is deeply guided by robust ESG principles. The ESG slides in the presentation as well as our fiscal '25 sustainability report highlight all our initiatives and achievements on this front. JMR-operated airports and subsidiaries continue to define global benchmarks with leading accolades, reflecting our relentless pursuit of excellence and innovation. These milestones reaffirm our commitment to delivering superior infrastructure and enhancing long-term stakeholder value. In closing, fiscal '26 is not just another milestone, but a testament of the progress we have built over the years, where our strategic initiatives are now gaining traction, shaping GMR Airports into a global, diversified and future-ready infrastructure platform. The presentation with all financial numbers is already available with you. If not, you can download it from the IR section of our website. We are available to respond to your questions on this call and offline after the call. And now I would like to open the forum for queries that will be addressed by my colleagues and myself from the corporate and the business teams. Thank you.

[Operator Instructions] The first question comes from the line of Mohit Kumar with ICICI Securities.

Congratulations on a very good year. My first question is, sir, can you please help us with the reason and sharp improvement in share of profit of investment accounted for using equity method, the particular line item has seen a jump from INR 21-odd crores in FY -- in Q3 to INR 161 crores in Q4.

This is basically because of the claims received by the Crete Airport from Government of Greece. This has been accounted by the Crete Airport, around EUR 62 million. And after net of taxes, the proportionate amount of 21% has been taken in our share of profit is around about INR 100 crores...

Understood. My second question is, sir, there is a negative tax item which you are paring in Hyderabad Airport Financials, which is around INR 97 crore negative number, while it was positive for last 3 quarters. Anything there which is exceptional?

It is not an exceptional. As you know, the new tax regime is coming into force this current financial year onwards, which is now mandatory more or less to all the corporates. So Hyderabad Airport is now moving from 35% tax bracket into 25.17% tax bracket. Accordingly, the entire deferred tax liability, which was created earlier has been reversed to the extent of about INR 120 crores.

Understood. Understood. That's very helpful. My third question is, can you please help with the CapEx number for FY '26 and the expected CapEx in FY '27 across your various businesses?

The CapEx across the businesses in the next financial year '26, '27 will be more or less only in case of the Bhogapuram because other airports are doing only operational CapEx. Bhogapuram will be incurring maybe around INR 700 crores to INR 800 crores to complete the project in '26, '27.

And what was this number for FY '26, sir, FY '26?

FY '26, almost around INR 1,800 crores we have spent.

This is across various businesses, right? Yes, everything in CWIP.

Next question comes from the line of Nathan Gee with Bank of America.

Maybe 2 questions from me. Firstly, look, the second Noida Delhi Airport is opening soon. Are you seeing any signs of whether it's cargo or passenger flights being moved over, particularly on the cargo side? So that's the first question. Second question is just on Hyderabad and domestic traffic. So April is still showing some softening. Obviously, some of that's probably war related. But if the war ends, do you think we could actually start to see some improvement in that traffic when we look to winter '26, '27? So do you think Indigo could be able to restore flights? Or have other airlines expressed some interest in adding into those slots?

Yes, Nathan, thank you for your question. I'll answer your second question first. We do expect improvement in conditions maybe in the second half of the current fiscal year. The current first half is pretty much locked in, and it has been adversely impacted by both airspace closure and also the conflict in Iran. So -- but in the second half, we do expect this to improve. Even if we were to achieve what you call, a settlement between the U.S. and Iran today, it will take at least a few months for things to normalize. So that is the -- that is our understanding on the outlook. The second part is also this happens to be also a lean season. So we don't expect too much of uptick in traffic in the current conditions. But September onwards, I think we should be in a much better position compared to the first half of this year. Coming to the second airport at Noida, and we don't see any airlines switching over or leaving their slots at Delhi Airport and moving to Noida Airport. I think that airport will generate its own demand. We have seen because we have operated in another city, which has 2 airports, which is Goa, where when we came in, we actually created our own demand and the whole system traffic went up. So we do not expect any cannibalization of demand from our airport to Noida Airport on the passenger side for sure. But on the cargo side, there may be some impact because that part of the country has lots of industries, which are more dominated towards agri products and also automobile, which may form the bedrock for cargo traffic to develop in that part -- in that airport. So beyond that, we don't see any impact. But we are working -- our team members are pretty much giving adequate support to the industrial houses to ensure that the traffic is -- continues to be -- the cargo traffic continues to be handled at Delhi Airport. So I don't expect any downtick on either the passenger or in the cargo business as such.

Next question comes from the line of Prateek Kumar with Jefferies.

I have 2, 3 questions. So firstly, on your traffic again. So I mean, based on the current situation of macro, will be right to assume like in FY '26, we had flat to 1% growth, probably just to slightly better at like maybe 3% to 5% growth in terms of overall traffic for the year. Again, it's difficult to predict, but given first half is like significantly impacted for full year, we should look at like 5% growth...

No, absolutely, Prateek. I think we need to keep into perspective that fiscal '26 had an unfortunate accident with Air India in Ahmedabad, which, of course, forced Air India to get all their planes reinspected under directions from DGCA. So that, of course, had an impact on capacity available for travel. And second part is that, again, a black swan event of a conflict in the Middle East has impacted traffic because it has added about 1.5 to 2 hours of travel time from India to Middle East by the Indian carriers. As you may be aware, Indian carriers still cannot access Pakistani airspace that their space is closed. So we have to -- from Delhi, we have to go -- carriers have to go down a little south and then they cut across into Europe with some -- for technical stopovers in Europe before the flight into North America. So that has impacted the traffic. It has impacted the ticket pricing. And -- but we believe that these are all transitory in nature. So a flat 1% growth going to about 5% to 7% growth for the full fiscal year guidance, I think we are pretty much on there. We are pretty confident that we will achieve. You also need to keep into perspective that 2 new airports are also coming in our portfolio, which will go live, which will add to the numbers. So Bhogapuram will commercially open in quarter 2 of this fiscal year. And Nagpur is a brownfield airport that also contribute -- start contributing in fiscal -- in quarter 2. So these will add to the traffic. But from an existing portfolio perspective, I think it's reasonable to assume a 5% to 7% growth overall.

Sure. On Hyderabad, traffic has been reeling like for the past 3, 4 months. I know you would have lost some traffic to other cities? Or how should we look at like in this market?

I think Hyderabad and people usually compare Hyderabad and Bangalore. And I think Hyderabad's pace of growth was far higher compared to other airports, including Bangalore. It's a process of normalization and rationalization that the airlines are taking, which are pretty much normal in their planning process and our planning goes pretty much in line with their planning. So not much to worry about it. It's just getting -- things are getting only rationalized and normalized there. So if you look at last year or last 2 years, Hyderabad galloped much, much faster than the other airports.

Okay. And third question on GAL platform. So we added like major businesses on DTC and cargo in FY '26. What do you think like we should be looking forward -- what we should look forward to for FY '27 and '28 in terms of incremental growth opportunities, which can add growth to the platform business?

So for the non-aero platform business, I'll ask my colleague, Rajesh, to actually pitch in. But broadly, what I would like to highlight to you is that our strategy of creating a platform from non-aero is now reflecting in numbers. Non-aero platform numbers are now higher than Hyderabad Airport numbers, okay? And so you need to appreciate the strategy where with least capital employed, we are creating revenue and earnings. But on an overall basis, what the outlook is, I'll just allow Rajesh to give his perspective there.

Thanks, Saurabh. Yes. So Prateek, FY '27, Bhogapuram will become operational. So linked to that will be the non-aero businesses, which are part of GAL platform. So those will get added. As we just Saurabh just mentioned, we got Nagpur Airport. So we'll also be looking for non-aero-related opportunities in Nagpur. We are also evaluating a few opportunities outside of GMR, but it is too early to even talk about that at this stage. We'll let you know once we reach a certain stage of -- but our endeavor is to get as many businesses as we can get from our own airports, plus also actively looking at opportunities outside of GMR Airports.

So just to also add to what Rajesh is saying, I think when we were creating this platform, we were looking at a secular growth in the business of anything of 17%, 18%. Correct me if I'm wrong, Rajesh. And we believe that organically with the existing businesses, we'll continue to grow with that kind of CAGR.

Yes, Saurabh. You're right. We are looking at upward of 15%, 16% of growth year-on-year.

One last question on your Hyderabad tariff. We have signed for -- we have right for that multiyear proposal. What is the stage there? And how should we look at tariffs for FY '27, '28 in the next period?

The tariff application was already filed in last financial year. And the ERI is at active stage of considering the application. We are expecting the tariff should come in the third quarter of this financial year. And tariffs, of course, we can't give exactly the number, but the tariff will be much better than the current tariffs.

Next question comes from the line of Karthik Chellappa with Indus Capital.

Congrats on the quarter. So I have 3 questions.

Mr. Chellappa, sorry for interrupting. We cannot hear you. Can you speak a little louder?

Okay. Is this any better?

No. No.

Okay. Are you able to hear me now?

Yes, a little better than before. Please continue.

Okay. Great. So congrats on the quarter. So I just had 3 quick questions. The first one is, if I were to look at the Delhi Airport non-aero revenue growth this quarter, it was a bit soft. So apart from the geopolitical developments and the airspace restrictions, was there any other factors or so which impacted that growth? And when can we expect to see some sort of recovery in that particular revenue item?

Rajesh?

Yes. So I think when you look at the non-aero absolute volume and growth, since the traffic growth has been suboptimal, so that also reflected in the overall non-aero revenue growth. And then secondly, there were a couple of waivers, which were pertaining to the earlier period. Those have also been accounted for. So net impact of that. But if you see in terms of our SPP growth for non-aero, it has been -- in this quarter has been in the range of about 5% or so, which is, again, we generally look at 7% to 8% SPP growth. So if you see it in that light, yes, it is slightly lower than what we generally achieve, but for these 2 reasons, which I just mentioned.

In case of the Delhi Airport, in case of non-aero revenues, there was some reversal of about INR 23 crores of the cargo strike lining of the deposits that has impacted. Otherwise, the growth was normal. There are certain reversals which have to happen that have been taken place.

Okay. Excellent. My second question, sir, is on Hyderabad. We already talked about the softness in the traffic for the fourth quarter as well as some of that also in April. But if I look at the absolute EBITDA growth this quarter, that has also been soft, which has resulted in some level of margin compression. So if we are expecting the normalization to happen in the second half of this year, so can we then say that in the first half, the margins at Hyderabad Airport will still be range bound and somewhat under pressure simply because the volume is yet to normalize, whereas the costs are sticky. So would that be like a reasonable inference?

No. So generally, your comment would be accurate. But as we are also able to control our costs quite effectively. But from a guidance perspective, I would say that the first half of the year will be softer and it will recover in the second half. So from a general comment of yours, I would align with that.

Okay. Excellent. My last question, sir, is if we were to look at our net debt, it has seen some moderation quarter-on-quarter. And most of that has actually come at the Dal stand-alone level. Now that Bhogapuram will be operational, let's say, in 2 quarters down the line, and we really don't have a lot of CapEx lined up for FY '27. Can we assume that the net debt trajectory from here on will actually be on a downward trend?

No. In the '26, '27 still Bhogapuram CapEx, the final payments will come up, which will be around INR 700 crores to INR 800 crores. So to that extent, debt will go up because the entire equity infusion was already completed. And other than that, maybe a little debt may come up in case of the Nagpur. So other than these 2, there are no further debt rising.

So we can assume about INR 700 crores, INR 800 crores of the final payments of Bhogapuram to hit books and about INR 200-odd crores coming for Nagpur. So about INR 1,000-odd crores in total debt will go up. And of course, there will be some mandatory debt payments that are happening that will adjust for the downward slope. But I think the key thing that you really need to look at is what is my net debt-to-EBITDA number. That is a metric that you have to follow more accurately than absolute number of debt.

Okay. Great. And sir, just you had mentioned that for Delhi Airport, your international passenger capacity has now gone up by about 50-odd percent to about 32 million. Like how many years of demand do you think this can cater to? Just if you were to hazard a guess without an explicit guidance because right now, I think we are doing about 21 million, 22 million. I'm just trying to see whether -- how many years of demand can this actually service before the next phase of expansion?

So this will capture for the next 4 to 5 years of the international traffic growth. By that time, then we will be able to see whether any additional capacity has to be created, but this will take care of next 3 to 4 years requirement of international traffic.

Yes. Just to add to what GRK garu highlighted, I think we are very well covered for next 5 years. But we -- the way the design of the airports have also happened, there's a lot of flexibility available. So as you are aware, our strategy is to capture more and more of international traffic. It helps in our non-aero business. If some CapEx needs to be incurred after 4, 5 years to convert any particular part of the terminal or peer into an international one will be undertaken.

Next question comes from the line of Kaseedit Choonnawat with Citigroup.

Congrats for such a strong result. I have 4 questions, half of them being maintenance. Firstly, I would like to follow up on the associates jump. You mentioned that about INR 1 billion came from claims from the Greece government on Crete Airport. Can you please further elaborate what claim is that for? And even if I take away INR 1 billion, the remaining INR 620 million is still quite a sizable quarter-on-quarter jump. What's that driven by? Is it like by advertising revenue or something like that? Let's start with that first question is that.

In case of the Crete, as you know, the concession -- the construction period has to be extended by 2 years due to the COVID. So it is a force majeure and the airport has made a claim on the government for the loss of profit for the 2 financial years, '25 calendar year and '26 calendar year. So accordingly, the government of Greece has considered the claim for the entire calendar year of '25 is about EUR 62 million, but they have already disbursed for about 6 months claim on what has already been received. So considering that INR 62 million claim, which has already been accounted for in the books by the CIT company, after net of taxes because this will come as an income and on that taxes have to be paid around about 25% net of tax, the balance amount is again distributed among the shareholders and GMR holds about 21.6% stake. So that translates into around INR 100 crores as our share of profit. Is it clear?

Yes, that part is clear. And next is such a strong -- excluding that amount, it's still quite a strong Q-on-Q increase. What is it driven by?

The international JVs, we also have JVs in DIAL and Hyderabad -- Delhi Airport and Hyderabad Airport. So this remaining what you are talking about is with respect to the Delhi Airport and Hyderabad Airport. Especially if you look at Delhi Airport, the big one is L's advertising. And also, you know that cargo was there for some time. So all those are also accounted for in this the difference what you are talking about. Similarly, in Hyderabad also, some amount is there.

All these are JV ownerships.

Okay. That's very clear. Next question is on Hyderabad tariff. I think about a year ago, I asked the management and you mentioned that because there's not that much CapEx at Hyderabad, we should be expecting close to flat tariff heading into the next regulatory period. What has changed that led to upward guidance in the passenger service charges of Hyderabad?

I think we have already explained in the last call that Hyderabad Airport has filed an application for the tariff determination for this current control period, considering even the expansion because the Hyderabad Airport has built 34 million capacity, which is almost full. It is operating. So we have already considered presented to the regulator that there will be an expansion on northern side of the airport. So considering that expansion CapEx also included, of course, the benefit of this expansion may not come full amount because the expansion will get completed by '31/'32. But a small amount of some portion of that expansion benefit also is expected to get in the tariff determination. That is one point. The second point is in the third control period in Hyderabad Airport, if you look at it, the regulator has postponed around INR 600 crores of the revenue to the fourth control period. That INR 600 crores on NPV basis, about INR 1,000 crores additional revenue, Hyderabad Airport is entitled, which regulator is going to consider that will also add additional revenue, additional pax yield per pax. So these are the 2 factors which we are considering that there will be improvement in the yield per pax in case of Hyderabad.

Okay. That's clear. And last 2 questions. On Bhogapuram, how much jump in depreciation and amortization per year we can expect? And the last question is, can you please elaborate more on where the -- why this quarter we have such a large tax credit?

So in case of the Bhogapuram Airport, the entire project cost, which we have already explained is about INR 47 billion. The depreciation will be on an average around 4% to 5%. It's about INR 200 crores will be the depreciation in case of the Bhogapuram Airport. But since it is going to be operating only for about 3 quarters, the depreciation could be around INR 130 crores to INR 150 crores as far as the Bhogapuram Airport is concerned. So regarding the tax credit, which we have taken in case of Hyderabad is basically a reversal of the deferred tax liability created because when the tax provisions were at 35%, we have kept creating the tax liability for future years. Since the tax rates have come down from 35% to 25.17%, there was no need to keep that liability. To that extent, we have reversed, which is about INR 120 crores in case of Hyderabad...

Next question comes from the line of Ankita Shah with Elara Capital.

Firstly, sir, how much traffic can be added by Bhogapuram and Nagpur? And then ex of that, how much our core portfolio can grow, which gives us better clarity on the 5%, 6% growth for the full year number that you are targeting. I just want to see how much new airports can add and how much our existing portfolio can grow in terms of traffic?

As far as the Bhogapuram is concerned, Vizag Airport is handling around 2.95 million -- so if you consider the 9 months period, we can expect around 2.25 million minimum, but we are expecting better growth because the Vizag Airport doesn't have in the night landings and the takeoffs. So we are expecting a better traffic, maybe better than 2.25 million for a period of 9 months. In case of the Nagpur, it is also operating around 2.9 million traffic. So if we are going to take over in the third quarter, I think second quarter, we are going to take over this current financial year. So then we will be operating around 2.25 million on a yearly basis for the remaining 9 months period. So both put together will be around 5 million will be adding to the traffic in addition to the natural growth in Delhi and Hyderabad...

Also, sir, tariff orders are in place for both Bhogapuram?

In case of Bhogapuram, tariff application has already been filed. We are -- now as per the latest guidelines issued by the regulator, they will release the full tariff only after the assets have been fully capitalized and the financial results are available. So we are expecting by end of this month or before starting up operations an ad hoc tariff from the regulator, which will be around 75% of the expected full tariff. So that is in case of the Bhogapuram Airport. Since we have already filed application, we can expect that ad hoc tariff before starting up the operations. As far as the Nagpur is concerned, it has already got an existing tariffs. That will be continued for some time until we finalize the master plan and filed application with the regulator for the tariff determination.

Got it. Also, you mentioned about the growth in the real estate segment as well. So are we looking at any CapEx for developing the real estate on our own?

So we are doing a few projects already. Maybe, Aman, you can just highlight what is the current CapEx plan there for the current year. The next business plan, of course, will be in the future. So currently, in Delhi, there are 3 projects that are under development. We have a hotel project pre-leased to Chalet. 400 keys that hotel building will be ready for handover this financial year. There is an office building in Aero City, which is also under development, scheduled for completion towards the end of this year. And then there is a hospital project, which has just started. Again, a building lease to a client. That project is about 1 million square feet total built-up area and has very recently just started construction 3 weeks ago. As far as the CapEx layout, we expect total CapEx in this financial year to be at INR 450 crores.

So Bhogapuram, Nagpur and real estate put together could be around INR 1,400 crores of CapEx for this year, FY '27?

Yes, broadly -- but just to again highlight that these are all fully funded through construction finance. So it doesn't impact my cash flows and they're on to SPV. So...

Got it. Sir, any update on the arbitration going on for Delhi Airport tariff revision?

As far as the tariff revision, the arbitration is not for a tariff revision. The arbitration was for the MA payment, but the matter is now pending before the bench of the High Court as far as the MA issue is concerned. And regarding other -- as Chirag is concerned, it is before the Supreme Court. We are expecting the start hearing after the summer holidays, maybe around the end of June.

And the last one, recently, Group ADP sold a stake in the company, which was taken up by GMR promoters. Now what is the thought process going forward on this stake ownership? Also, any -- when will the FCCB conversion for ADP's shareholding in?

So I think ADP's press release is quite clear. They have indicated that post this current stub of sale of about 7.3% stake in GAL, they do not contemplate any further stake sale in the near future. On the FCCBs, the promoters who had a call option to purchase the FCCBs, which were originally scheduled to be purchased in March of '28, is now going to be purchased by March of '27. The conversion of these FCCBs will happen in its scheduled time in March of '28 only. So that is the -- nothing has changed on that front.

Sir, can I take one last one?

Sure, go ahead.

What could be the impact of UDF and lending fee reduction for this quarter that has been advised by the Airport Authority of India. could be the impact of that for this quarter?

Yes. The -- basically, the order has been issued by the regulator ERA are the directions of the Ministry of Civil Aviation. This reduction in the landing charges by 25% is only for domestic movement, but not for the international. The total impact is not more than about INR 50 crores on a yearly basis. For the quarter it will be about INR 15 crores to INR 20 crores maximum. However, this amount will get trued up in the next control period. So there will not be any loss to the company.

So it's only a cash flow impact. It has no impact on return on equity, which gets trued up in the next tariff period.

Next question comes from the line of Samay Sabnis with Helios Capital.

Just one question from my side. So when I see your result presentation on Slide 20, I see significant eliminations made in your EBITDA composition in Q4. So could you please provide some color on these eliminations?

Sir, in case of the elimination, basically, the -- for example, GAL has paid revenue share to the DI. That will get eliminated because consolidated number. And Hyderabad is duty-free earlier paid to the Hyderabad Airport. They get eliminated. So any intercompany payments which have happened, will get. For example, the dividend, which we have received from Hyderabad Airport, nearly INR 200 crores, that gets eliminated in the consol. So these are all eliminations, which are intercompany transactions under the consol numbers.

Ladies and gentlemen, due to time constraints, we have reached the end of question-and-answer session. I now hand the conference over to Mr. Saurabh Chawla for closing comments.

Yes. Thank you, everybody, for attending this quarter 4 annual results call. We are available for any further queries that you may have. You can meet send e-mails or talk to the IR team. We'll be happy to answer any of your queries. Thank you so much.

Thank you. On behalf of GMR Airports Limited, that concludes this conference. Thank you for joining us. You may now disconnect your lines.