GVK Power (GVKPOW) - ICICI Direct

In terms of cost escalation, MIAL has seen a cost overrun
of | 2700 crore and cost approval & tariff revision
application has been made to AERA. The decision on this is
expected in the next three or four months
Airport division
MIAL and BIAL reported a muted topline performance with sequential
decline of 3.3% and 2.2% to | 321.6 crore and | 150.5 crore, respectively.
In terms of operating performance, the passenger movement remained
muted in both airports. MIAL’s total passenger declined 2.7% sequentially
to 7.8 million in Q4FY12. While the number of domestic passengers
declined 4.2% QoQ to 5.3 million, the number of international passengers
grew 0.6% QoQ to 2.5 million. BIAL also reported a decline of 7.8%
sequentially in passenger movement to 3.1 million in Q4FY12.
In terms of cost escalation, MIAL has seen a cost overrun of ~| 2700
crore to |12,500 crore and cost approval and tariff revision application
has been made to AERA. The cost overrun in MIAL was on account of a
delay in shifting of the Shivaji statue, increase in scope of work and rise in
cost of construction. There continues to remain uncertainty over the
funding of the project especially after the cost overrun as AAI may find it
difficult to infuse additional equity (as reported in the media article). The
company is also contemplating an application with the regulator for an
increase in AERO charges to meet the funding gap.
GVK is also looking for a private equity deal in the airport segment to
raise ~| 3000 crore to repay the debts raised for acquisition of a stake.
Currently, the foreign players are confused with the government stand
and, hence, are delaying their decision.
Exhibit 8: MIAL’s performance
| crore Q4FY12 Q4FY11 Q3FY12 QoQ (Chg %) YoY (Chg %)
Revenue 321.6 330.7 332.5 -3.3 -2.7
EBITDA 103.1 137.1 122.0 -15.4 -24.8
Margin (%) 32.1 41.4 36.7
PAT 32.9 64.3 42.9 -23.3 -48.8
Margin (%) 10.2 19.4 12.9
Source: Company, ICICIdirect.com Research
Exhibit 9: BIAL’s performance
| crore Q4FY12 Q4FY11 Q3FY12 QoQ (Chg %) YoY (Chg %)
Revenue 150.5 139.1 153.8 -2.2 8.1
EBITDA 96.8 93.0 108.6 -10.8 4.1
Margin (%) 64.4 66.9 70.6
Adj. PAT 33.2 40.4 56.3 -41.0 -17.7
Margin (%) 22.1 29.0 36.6
Source: Company, ICICIdirect.com Research
Exhibit 10: Operational highlights of airport division
BIAL MIAL
Q4FY12 Q4FY11 Q3FY12 QoQ (Chg %) YoY (Chg %) Q4FY12 Q4FY11 Q3FY12 QoQ (Chg %) YoY (Chg %)
INTERNATIONAL
Aircraft Movements per Day 52 47 52 -1.4 9.2 199 193 204 -2.4 3.1
Passenger Movements (Mn)
DOMESTIC
0.6 0.6 0.6 -3.8 7.1 2.5 2.3 2.5 0.6 8.9
Aircraft Movements per Day 263 266 282 -6.7 -1.1 487 489 493 -1.1 -0.4
Passenger Movements (Mn)
TOTAL (INT+DOM)
2.5 2.4 2.7 -8.7 4.3 5.3 5.2 5.5 -4.2 1.7
Aircraft Movements per Day 315 314 335 -5.8 0.5 686 682 696 -1.5 0.6
Passenger Movements (Mn) 3.1 2.9 3.3 -7.8 4.8 7.8 7.5 8.0 -2.7 3.9
Source: Company, ICICIdirect.com Research
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