Fundamental Grading of 3+/5

indicates Good Fundamentals

Valuation Grading of C indicates
Fairly Valued on a Relative Basis
Key Stock Statistics

Current Market Price* (Rs.) 34.60
Shares Outstanding (crore) 389.24
Market Cap (Rs. crore) 13467.8
52 Week High (Rs.) 64.35
52 Week Low (Rs.) 29.00
Free Float (%) 29.4%
Beta 1.4
EV/EDBIDTA FY11 Est(x) 22.0
Bloomberg Stock Code GMRI IN
* As on June 1, 2011 (NSE)



























Key Financials FY10A FY11A FY12E FY13E FY14E
Operating Income (Rs. crore) 4566.5 5,773.8 8,116.9 13,637.4 15,753.1
EBITDA Margin (%) 29.9 26.9% 26.3% 34.0% 38.9%
PAT Margin (%) 4.9 -18.1% -0.9% 4.3% 6.0%
EPS (Rs.) 0.4 (2.4) 0.0 0.7 0.9
P/BV (x)

1.7 1.4 1.3 1.2
RoE (%) 2.0 -2.8% -2.6% -1.2% 2.9%
RoCE (%) 8.2 0.2% 4.7% 9.0% 9.6%
EV/EBITDA (x) 23.7 22.0 18.9 9.3 6.7




ICRA Online Grading Matrix
ICRA Online Equity Research
June 01, 2011
GMR Infrastructure Limited
Industry: Infrastructure
Q4 FY11 Results Update

Large one-time write-off on InterGen long term growth story
intact


Valuation Assessment
A B C D E
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Shareholding PatternMarch 2011
Share Price Movement15 months
GMR Infras 74% growth in revenues in Q4 FY11 is largely in line with our estimates while
earnings from core operations are marginally better than expected. Q4 losses of Rs. 1007
crore are primarily on account of write-offs pertaining to the closure of the InterGen stake sale
deal. While airport revenues are poised to grow, positive developments on the regulatory front
would be critical to future earnings growth. GMR Infra continues to make strides in the energy
division with stability in the operational 823 MW and progress in the development of the
ongoing 4138 MW fuel availability for operational/ongoing power plants is however a key
determinant of the divisions future performance. GMR Infras funds position has been
bolstered by the recent USD 200 million PE investment within the airports Hold Co and the
release of approx USD 200 million through the sale of InterGen. Overall, despite weak
performance in FY11, we are bullish on the stocks long term prospects.

We retain the fundamental grade of 3+/5 assigned to GMR Infra. Although the stock
continues to trade at a premium to its peers on various valuation multiples, we believe that
the premium valuations for GMR are justified and hence also retain the Valuation Grade at
C.


Revenues grow 74% to Rs. 1962 crore in Q4FY11:
While growth has been steady across segments, much of the revenue growth in Q4FY11
has been driven by the core operations like the airports (82% y-o-y) and the energy (40% y-
o-y) divisions. Growth in the EPC division was also substantial, albeit on a low base. Overall
growth in revenues for FY11 has been in line with our estimates.

Growth at EBITDA level is encouraging:
GMR Infras performance at the EBITDA level is marginally better than our expectations
growth in profitability within the airports segment has been robust despite subdued
performance by DIAL, as GHIAL, Male and Sabiha Gokcen airports rallied sharply. Strong
EBITDA growth within the energy segment was largely on account of improved
performance by GMR Energy. EBITDA within the roads segment grew by 12% y-o-y.
Consolidated EBITDA margin for FY11 is lower than that for FY10, but remains higher than
our expectations for FY11.

InterGen stake sale results in substantial one-time losses:
Even while part capitalisation of T3 in DIAL continued to depress net margins, Q4FY11
profitability was hit by a substantial non-recurring loss on account of the 50% stake sale in
InterGen (closure of the deal was earlier expected in FY12). Adjusted for this transaction,
losses for FY11 at Rs. 131 crore were marginally lower than our expectations.

Sustained progress on projects under development; improved funds position:
GMR Infra continues to show traction in the development of roads and power plants we
believe GMRs progress on project execution continues to be an important differentiating
factor vis-a-vis its peers. Approx USD 400 million (USD 200 million each from the airports
PE and InterGen stake sale) has further strengthened GMRs funds availability.
Source: Company; ICRA Onlines Estimates A: Actual; E: Estimated


ICRA Equity Research Service GMR Infrastructure Limited


# 2


Segmental Performance:

Energy Division:
Figure 1: Operational/Financial details of operational 823 MW:
Q4FY11 Q4FY10 Y-o-Y
Growth %
FY11 FY10 Y-o-Y
Growth%
Gross Revenue (Rs. Crore) 601.1 428.8 40 2185.8 2039.5 7
EBITDA (Rs. Crore) 105.6 52.1 103 346.2 301.0 15
EBITDA Margin (%) 17.6 12.2 - 15.8 14.8 -
PAT (Rs. Crore) 27.8 97.5 -71 224 176.9 27
PAT Margin (%) 4.6 22.7 - 10.2 8.7 -
PLF%
GMR Energy 63 - - 59 28 -
GMR Power 67 63 - 52 65 -
Vemagiri Power 75 90 - 80 86 -
Source: GMR Infra

Barring GMR Energy, where the PLF has improved relative to past levels (primarily on account of the fact that the
barge-based plant was un-operational for a large part of FY10), PLF has declined for both GMR Power and Vemagiri
Power. We expect the trend of lower PLF to continue with the completion of TN Assembly elections and the imminent
curtailing of gas supplies to GMR Energy and Vemagiri Power given lower KG basin gas production
Revenue growth of 40% in Q4FY11 was largely driven by GMR Energy (for reasons stated above) and the
consolidation of Homeland Energy in this fiscal. Growth for the full year was muted on account of declining generation
within GMR Power and Vemagiri Power and declining realisations for GMR Energys merchant component
Net profitability in Q4FY10 had been boosted by the creation of a deferred tax asset in Vemagiri Power (on account of
past accumulated losses) some portion has been written off in Q4FY11 resulting in net losses for Vemagiri Power and
thereby lower profits for the entire division. However overall profitability of the energy division for FY11 has been
enhanced by exceptional income of Rs. 140 crore (Island Power related), adjusted for which net profits for FY11 would
be lower than FY10
Work on 4138 MW capacity (GMR Rajahmundry, GMR Chhattisgarh, GMR Kamalanga and EMCO Energy) continues
to show progress in implementation. In addition to completion within time and budgeted costs a key determinant of
GMR Infras prospects within the energy division would be the ability to secure coal and gas supplies at competitive
rates particularly in the light of the precarious domestic coal supply position and the drop in production from RILs KG
basin gas fields.

Airports Division:
Figure 2: Operational/Financial details of airports
Q4FY11 Q4FY10 Y-o-Y
Growth
FY11 FY10 Y-o-Y
Growth
Gross Revenue (Rs. Crore) 1081.1 593.1 82% 3046.9 2006.3 52%
EBITDA (Rs. Crore) 205.9 150.9 36% 656 529.6 24%
EBITDA Margin (%) 19.0% 25.4% - 21.5% 26.4% -
PAT (Rs. Crore) -89.3 -19.2 - -221.2 -97.2 -
PAT Margin (%) -8.3% -3.2% - -7.3% -4.8% -
Gross Revenues (Rs. Crore)
DIAL 349.7 358 -2% 1243.2 1153.2 8%
GHIAL 148 107.9 37% 516.6 421.1 23%
Sabiha Gokcen 151.4 112.8 34% 610.8 375.1 63%
Male Airport 301.1 - - 396 - -
PAT (Rs. Crore)
DIAL -115.1 39.1 - -240.4 34.7 -
GHIAL 2.8 -14.4 - 77.6 -60.3 -
Sabiha Gokcen -19.6 -53 - -93.6 -58.2 -
Male Airport 30.1 36.7
Traffic (Million pax)
DIAL 8.2 6.8 21% 29.9 26.1 15%
GHIAL 1.94 1.59 22% 7.63 6.49 18%
Sabiha Gokcen 2.85 2.2 30% 12.24 7.72 59%
Male Airport 0.67 0.95
Source: GMR Infra
ICRA Equity Research Service GMR Infrastructure Limited


# 3


Traffic growth was healthy across DIAL and GHIAL while Sabiha Gokcen continued to grow at a fast clip
Despite sluggish revenue growth at DIAL (unadjusted for JV impact), robust growth at GHIAL and Sabiha Gokcen and
the inclusion of the Male airport have resulted in an 82% y-o-y growth in Q4FY11 (52% y-o-y for FY11)
DIALs losses in Q4FY11 and full year 2010-11 were largely on account of the capitalisation of T3 in the last two
quarters of 2010-11, resulting in a substantial increase in depreciation/interest charges. Some amount of pending
capitalisation is targeted in Q1FY12 losses are expected to continue over the near term.
GHIAL has reported its first profit in FY11 largely on account of improved revenue generation through increased UDF
and a substantial deferred tax asset created on account of past accumulated losses
The AERA appears to have prima-facie approved of DIALs total project cost and sanctioned enhanced ADF to meet the
project cost. DIAL is expected to file for its tariff determination (in line with the State Support/Concession Agreements)
shortly AERAs decision on DIALs tariff fixation would be critical to DIALs future profitability. In case of GHIAL, the
AERA has mandated the use of a single till which would adversely impact revenues/profitability this decision is
currently under appeal with the Appellate Tribunal
Male Airport is currently undergoing capex (fully funded) while Sabiha continued to perform in line with our expectations

Roads Division:
Figure 3: Details of operational road assets
Q4FY11 Q4FY10 Y-o-Y
Growth
FY11 FY10 Y-o-Y
Growth
Gross Revenue (Rs. Crore) 98.9 91 9% 390.2 346.1 13%
EBITDA (Rs. Crore) 78.6 70 12% 320 278.2 15%
EBITDA Margin (%) 79.5% 76.9% - 82.0% 80.4% -
PAT (Rs Crore) 0.1 -20 - -45.6 -65.4 -
PAT Margin (%) 0.1% -22.0% - -11.7% -18.9% -
Source: GMR Infra

The three toll projects reported healthy growth in traffic although Ambala-Chandigarh continued to suffer from traffic
diversion to alternate routes. Barring Ambala-Chandigarh, we expect the other two operational toll projects to report an
improvement in revenues and profitability
Progress on the under construction road projects (2 toll and 1 annuity) is satisfactory













ICRA Equity Research Service GMR Infrastructure Limited


# 4


Annexure I: Financial Indicators


Rs. Crore FY10A FY11A FY12E FY13E FY14E FY15E
Revenues 4566.5 5,773.8 8,116.9 13,637.4 15,753.1 18,885.1
EBITDA 1364.3 1,555.5 2,132.3 4,635.4 6,135.2 8,211.7
Interest (850.3) (1,076.0) (1,550.0) (2,489.2) (2,980.0) (3,492.3)
Depreciation (612.2) (860.9) (883.2) (1,389.6) (1,684.4) (2,132.5)
Extraordinary Items (798.6) 0.0 0.0 0.0 0.0
PBT 193.1 (1,022.8) (179.6) 890.8 1,630.0 2,711.9
Tax 32.2 (23.9) 109.7 (308.6) (680.6) (981.7)
PAT before MI 225.3 (1,046.7) (69.9) 582.2 949.4 1,730.3
Minority Interest 66.9 (117.0) (86.3) 321.3 591.8 927.2
PAT after MI 158.4 (929.6) 16.4 260.8 357.6 803.1
No of Shares (Cr.) 366.2 388.0 389.2 389.2 389.2 389.2
EPS (Concern Share) 0.4 (2.40) 0.04 0.67 0.92 2.06

Rs. Crore FY10A FY11A FY12E FY13E FY14E FY15E
Share Capital 366.7 389.2 389.2 389.2 389.2 389.2
Reserves and Surplus 6300.3 7285.4 9570.5 11362.4 12833.4 13710.0
Preference Shares 0.0 1832.9 2243.0 893.0 0.0 0.0
Minority Interest 1790.2 1982.8 1785.9 4767.5 5467.9 5694.7
Loan funds 21371.3 24229.6 30291.4 34525.0 34803.6 33254.0
Other Liabilities -80.5 38.0 3997.7 5484.8 7426.1 9473.9
Total Liabilities 29748.0 35757.9 48277.8 57422.0 60920.2 62521.8

Gross Block 25272.5 33856.7 43169.8 49396.0 51929.9 51853.9
Less Acc Depreciation -2341.6 -3143.1 -4076.3 -5435.0 -7096.2 -8467.1
Net Block 22930.9 30713.6 39093.4 43961.0 44833.7 43386.8
Investments 4640.1 2974.1 4590.5 4637.6 4843.4 4785.7
Current Assets 4142.3 3373.2 5475.2 9788.3 12112.4 15353.9
Less Current Liabilities -1965.3 -1303.0 -881.4 -964.8 -869.3 -1004.6
Net Current Assets 2177.0 2070.2 4593.9 8823.5 11243.1 14349.3
Total Assets 29748.0 35757.9 48277.8 57422.0 60920.2 62521.8

Cash Flows (Rs Crore) FY10A FY11A FY12E FY13E FY14E FY15E
Revenues 4,566.5 5,773.8 8,116.9 13,637.4 15,753.1 18,885.1
Less Costs (3,122.9) (3,997.1) (5,912.5) (9,265.0) (10,085.2) (11,284.9)
Add/Less Working capital (295.1) 406.5 (858.1) (827.8) (123.7) (797.6)
Less Interest (787.4) (1,151.3) (1,550.0) (2,489.2) (2,980.0) (3,492.3)
Less Capex (7,100.6) (7,340.6) (10,592.4) (6,283.7) (2,579.4) (701.2)
Add/Less Investments (3,329.2) 1,862.9 2,108.9 1,208.7 1,368.7 1,619.2
Add/Less Borrowings 9,442.6 2,858.3 6,061.8 4,233.6 278.6 (1,549.6)
Add Fresh Equity 53.3 3,770.1 2,222.2 362.5 0.0 0.0
Total Cash Inflow/Outflow (572.8) 2,182.6 (403.2) 576.5 1,632.2 2,678.5

ICRA Equity Research Service GMR Infrastructure Limited


# 5



Key Financial Indicators FY10A FY11A FY12E FY13E FY14E FY15E
Growth Indicators
Sales Growth 14% 26% 41% 68% 16% 20%
EBITDA Growth 28% 14% 37% 117% 32% 34%

Profitability Indicators
EBITDA Margin 29.9% 26.9% 26.3% 34.0% 38.9% 43.5%
EBIT Margin 22.8% 14.8% 17.2% 25.1% 29.8% 33.4%
PAT margin 4.9% -18.1% -0.9% 4.3% 6.0% 9.2%
RoE 2.0% -2.8% -2.6% -1.2% 2.9% 5.8%
ROCE 8.2% 0.2% 4.7% 9.0% 9.6% 11.6%

Capitalization Ratios
Total Debt/ equity 2.5 2.1 2.2 2.0 1.9 1.7
Interest Coverage 1.6 1.4 1.4 1.9 2.1 2.4
Total debt/ EBITDA 15.7 15.6 14.2 7.4 5.7 4.0

Valuation Ratios
Price/ Sales 2.8 2.3 1.7 1.1 1.0 0.8
Price/ Earnings 80.0 NM NM 51.6 37.7 16.8
Price/ Book Value 1.9 1.7 1.4 1.3 1.2 1.1
EV/ EBITDA 23.7 22.0 18.9 9.3 6.7 4.5
NM: Not Meaningful


















ICRA Equity Research Service GMR Infrastructure Limited


# 6



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