Brokerage firm BOFA Securities initiated coverage on GMR Airports Ltd. on Tuesday, December 2, with a ‘Buy’ rating and a price target of ₹128 per share. This implies a potential upside of nearly 20% from the stock’s previous closing price.

Rationale for the Bullish Call

BOFA Securities believes GMR Airports is well-positioned for strong earnings growth, driven by:

• Rising air travel demand in India.
• A steady ramp-up in non-aeronautical and real-estate revenues.
• Favorable legal outcomes for the company.

The brokerage considers the stock’s current valuation of 15x adjusted EV/EBITDA attractive given this growth outlook.

Potential Catalysts and Key Risks

Catalysts identified include:

• Upward revisions to consensus estimates (BOFA’s EBITDA estimates are 10% higher than the Street).
• Reopening of Pakistan’s airspace.
• Regulatory clarity on tariff structures.
• Continued execution on non-aero and real-estate plans.
• The eventual commencement of dividend payouts.

Key risks highlighted are:

• Near-term traffic disruption once Delhi’s second airport (Noida International) becomes operational.
• Tighter regulatory actions in upcoming tariff resets.
• Geopolitical uncertainties affecting Delhi-bound flights.
• A still-elevated balance sheet.