GMR Infrastructure (GMRINF) 11

Result Update Rating matrix Rating : Under Review Target : NA Target Period : NA Potential Upside : NA What s changed? Target EPS FY16E EPS FY17E Rating Under Review Under Review Under Review Unchanged Quarterly performance crore Q4FY16 Q4FY15 YoY (%) Q3FY16 QoQ (%) Revenue 3,085.7 2,368.5 30.3 2,931.2 5.3 EBITDA 1,109.4 680.3 63.1 1,360.2-18.4 EBITDA (%) 36.0 28.7 723 bps 46.4-1045 bps PAT (953.5) (892.3) NM (379.4) NM Stock data Particular Amount Market Capitalization 6,736 crore Total Debt 49154 crore Cash 3121 crore EV 47,250 crore 52 week H/L 19 / 10 Equity capital 604 crore Face value 1 Price performance Return % 1M 3M 6M 12M Ashoka Buildcon 0.0 (22.4) (26.6) (23.2) GMR Infra (8.7) 5.5 (30.5) (18.7) Sadbhav Engg (11.4) (14.6) (17.3) (11.2) IRB Infra 2.4 2.3 (13.3) (9.1) PNC Infratech 9.8 20.2 8.0 43.9 Research Analyst Deepak Purswani, CFA deepak,purswani@icicisecurities.com Vaibhav Shah vaibhav.shah@icicisecurities.com Airport division continues to perform June 2, 2016 GMR Infrastructure (GMRINF) 11 GMR Infrastructure (GMR) reported 30.3% YoY growth in revenues to 3085.7 crore with 28.5% YoY growth to 1508.3 crore in the energy division and 32.2% YoY to 1180.7 crore in the airport division EBITDA margins expanded 723 bps YoY to 36.0% in Q4FY16 mainly aided by 1130 expansion in airport division margin to 40.5% GMR s losses widened to 953.5 crore in Q4FY16 from a loss of 379.4 crore in Q3FY16 mainly due to higher interest expenses, which grew marginally to 1149.3 crore in Q4FY16 from 1129.1 crore in Q3FY16. However, there was an exceptional item loss of 201.2 crore. Adjusting for this, adjusted net loss was 752.3 crore vs. 379.4 crore in Q3FY16. Further, consolidated net debt was at ~ 40000 crore as on Q4FY16 vs. 40248 crore in Q3FY16 In the airport division, GMR reported a good performance. While DIAL s passenger traffic reported 22.8% YoY growth to 13.13 million, HIAL s passenger traffic grew 18.1% YoY to 3.26 million in Q4FY16. Regarding tariff petition in DIAL, resolution of existing issues is expected to be resolved in next three to four months. Further, DIAL is looking to monetise 23-25 acre land while HIAL has leased 17 acre land to Amazon and is in the process of leasing another 23 acre land to a pharma company. For HIAL, DGCA issued notification restoring collection of airport charges with effect from November 5, 2015. UDF of 160 crore has been collected till March, 2016. HIAL has submitted its tariff proposal with AERA for second control period starting April 1, 2016, which will determine tariff for aero component, going ahead On the road front, GMR has signed a share purchase agreement to divest its 51% equity stake in Hungund-Hospet project and 26% stake in Ulundurpet project. In Hungund-Hospet project, 15% stake was transferred to the JV partner while the balance is to be transferred post approvals, which will reduce group debt by 1078 crore In the energy vertical, GMR has shown an improvement at EBITDA level, zooming ~3x YoY in Q4FY16. However, losses have extended significantly sequentially with the company reporting a net loss of 1019.5 crore in Q4FY16 vs. 379.7 crore in Q3FY16 on account of higher interest and depreciation charges as both units of Chhattisgarh plant commenced operation in November, 2015 and March, 2016 Tenaga will invest US$300 million (~ 2000 crore) for a 30% equity stake in GMR Energy s select portfolio of assets, the proceeds of which would be used to reduce consolidated debt A strategic debt restructuring (SDR) scheme was adopted for GMR Rajahmundry Energy. As per the SDR scheme, out of outstanding debt (including overdue interest) of 3,780 core, debt of 1,414 crore has got converted into equity by which consortium lenders would have 55% shareholding and balance 45% would be held by GMR Keeping it under review till regulatory clarity emerges We keep our recommendation under review for GMR till regulatory clarity emerges. In the airport division, though clarity emerged over the hybrid till model, clarity is yet to emerge from the regulator regarding regulated return for aero charges & monetisation of real estate assets, which will set the tone for long term profitability of the airport division. Secondly, in the power vertical, we would like to see sustainable profitability in the power division post stabilisation of recently commissioned power plants. ICICI Securities Ltd Retail Equity Research

Segmental details - Quarterly Exhibit 1: Airport division consolidated financial performance crore Q4FY16 Q4FY15 Q3FY16 YoY(%) QoQ(%) Net Revenue 1,201.9 914.2 1,089.1 31.5 10.4 EBITDA 694.0 468.6 647.6 48.1 7.2 Margin (%) 57.7 51.3 59.5 648 bps -172 bps PAT 112.2-4.6 32.5 LP 245.2 Margin (%) 9.3 NM 3.0 NM 635 bps Exhibit 2: Energy division consolidated financial performance crore Q4FY16 Q4FY15 Q3FY16 YoY(%) QoQ(%) Gross Revenue 1,508.3 1,172.7 1,560.8 28.6-3.4 EBITDA 198.1 66.1 579.7 199.7-65.8 Margin (%) 13.1 5.6 37.1 750 bps -2401 bps PAT (after MI) -1,019.5-601.1-379.7 NM 168.5 Margin (%) NM NM NM NM NM Exhibit 3: Road division consolidated financial performance crore Q4FY16 Q4FY15 Q3FY16 YoY(%) QoQ(%) Net Revenue 184.0 172.3 172.3 6.8 6.8 EBITDA 132.1 81.4 125.5 62.3 5.3 Margin (%) 71.8 47.2 72.8 2455 bps -104 bps PAT (after MI) -77.2-111.5-57.6 NM 34.0 Margin (%) NM NM NM NM NM ICICI Securities Ltd Retail Equity Research Page 2

Company snapshot 90 80 70 60 50 40 30 20 10 0 Jan-10 Apr-10 Jul-10 Oct-10 Jan-11 Apr-11 Jul-11 Oct-11 Jan-12 Apr-12 Jul-12 Oct-12 Jan-13 Apr-13 Jul-13 Oct-13 Jan-14 Apr-14 Jul-14 Oct-14 Jan-15 Apr-15 Jul-15 Oct-15 Jan-16 Apr-16 Jul-16 Source: Bloomberg, Company, ICICIdirect.com Research Key events Date Dec-15 Jan-16 Feb-16 Feb-16 Mar-16 Apr-16 May-16 Event Executes agreements for the proposed restructuring of holdings in GMR Airports Ltd. As per the pacts, GMR Infrastructure would be entitled to purchase the equity securities held by the private equity investors in GAL (GMR Airports Limited) before June 5, 2017. GMR Hyderabad International Airport (GHIAL), a joint venture company promoted by the GMR Group, commissions a 5 MW solar power plant for its captive consumption at Rajiv Gandhi International Airport (RGIA), Hyderabad Maldives airport arbitration tribunal rules in favour of GMR in Axis Bank Debt case The government proposes exemption of dividend distribution tax for passing of dividend by SPV to INVITs, positive for GMR GMR Infrastructure signs a share purchase agreement with JV partner Oriental Structural Engineers (OSE) to divest a 51% stake in GMR OSE Hungund Hospet Highways Pvt Ltd (GOHHHPL) According to media sources, GMR led Delhi International Airport (DIAL) decides to sell around 22-25 acres of land bank near the Delhi airport for which around six investors, both domestic and foreign, have shown interest. Even hospitality players are said to be in the fray for the land parcel City and Industrial Development Corporation (Cidco) selects GMR Infrastructure City as one of the three shortlisted bidders for the proposed Navi Mumbai airport Top 10 Shareholders Rank Name Latest Filing Date % O/S Position (m) Change (m) 1 GMR Group 31-Dec-15 0.5 2,852.1 0.0 2 GMR Business & Consultancy, L.L.P. 31-Dec-15 0.1 805.6 0.0 3 ICICI Prudential Asset Management Co. Ltd. 31-Mar-16 0.0 99.3 24.5 4 Carmignac Gestion 31-Mar-16 0.0 95.7 0.0 5 The Vanguard Group, Inc. 31-Mar-16 0.0 53.3 0.0 6 Dimensional Fund Advisors, L.P. 31-Jan-16 0.0 31.7 0.0 7 Norges Bank Investment Management (NBIM) 31-Dec-15 0.0 17.7 17.7 8 Birla Sun Life Asset Management Company Ltd. 29-Feb-16 0.0 11.5 4.6 9 Kotak Mahindra Asset Management Company Ltd. 30-Sep-15 0.0 10.8 0.0 10 BlackRock Institutional Trust Company, N.A. 31-Mar-16 0.0 7.0 0.9 Source: Reuters, ICICIdirect.com Research Shareholding Pattern (in %) Sep-15 Dec-15 Mar-16 Promoter 61.02 61.61 61.61 Public 38.98 38.39 38.39 Others 0.00 0.00 0.00 Total 100.00 100.00 100.00 Recent Activity Buys Sells Investor name Value (m) Shares (m) Investor name Value (m) Shares (m) ICICI Prudential Asset Management Co. Ltd. 4.3 24.5 UTI Asset Management Co. Ltd. -0.7-3.7 Norges Bank Investment Management (NBIM) 4.4 17.7 SBI Funds Management Pvt. Ltd. 0.0-0.2 Birla Sun Life Asset Management Company Ltd. 0.7 4.6 UBS (Luxembourg) S.A. 0.0-0.1 BlackRock Institutional Trust Company, N.A. 0.2 0.9 State Street Global Advisors (US) 0.0-0.1 Motilal Oswal Asset Management Company Ltd. 0.0 0.2 Emerging Global Advisors, LLC 0.0 0.0 Source: Reuters, ICICIdirect.com Research ICICI Securities Ltd Retail Equity Research Page 3

Financial summary Profit and loss statement Crore ( Crore) FY13 FY14 FY15 FY16E Net Sales 8,263.8 8,709.5 9,022.8 10,945.4 Growth (%) 8.1 5.4 3.6 21.3 Op. Expenditure 5,786.5 6,144.1 6,468.2 6,700.7 EBITDA 2,477.1 2,565.4 2,554.6 4,244.6 Growth (%) 49.3 3.6-0.4 66.2 Other Income 277.2 315.9 327.5 454.3 Depreciation 1,039.8 1,455.0 1,812.5 2,266.2 EBIT 1,714.5 1,426.3 1,069.6 2,432.8 Interest 2,099.0 2,971.9 3,571.9 4,057.7 Extraordinary Item 777.3 1,820.1-304.1-149.8 PBT 392.8 274.5-2,806.4-1,774.7 Tax 257.5 166.3 152.8 224.2 Rep. PAT before MI 135.3 108.3-2,959.2-1,998.9 Minority interest (MI) 47.3 98.4-225.9 162.1 Rep. PAT after MI 88.0 9.9-2,733.3-2,161.0 Adjustments 777.3 1,820.1-304.1-149.8 Adj. Net Profit -689.3-1,810.2-2,429.2-2,011.2 Growth (%) NM NM NM NM EPS NM NM NM NM Cash flow statement Crore ( Crore) FY13 FY14 FY15 FY16E Net Profit before Tax 392.8 274.5-2,806.4-1,774.7 Others 0.0 0.0 0.0 0.0 Depreciation 1,039.8 1,455.0 1,812.5 2,266.2 Diect Tax Paid 162.0 134.8 127.2 268.5 Int. & Finance charges 2,099.0 2,971.9 3,571.9 4,057.7 CF before chg in WC 3,369.6 4,566.6 2,450.8 4,280.7 Inc./(Dec.) in Curr Liab. 1,936.2-1,545.6 29.0 1,076.2 Inc./(Dec.) in Curr Ass. 2,736.8-304.3-1,546.4 218.7 CF from operations 2,568.9 3,325.2 4,026.2 5,138.1 Purchase of Fixed Ass. -5,552.4-7,292.8-408.8-2,644.8 (Inc.)/Dec. in Investment 438.8-596.8-533.1-561.4 CF from Investing -5,113.5-7,889.6-941.9-3,206.2 Inc./(Dec.) in Debt 7,409.5 3,989.5 2,322.7 1,416.1 Interest paid -2,099.0-2,971.9-3,571.9-4,057.7 Others -1,887.3-482.4 1,850.8 211.4 CF from Financing 3,423.2 535.2 601.7-2,430.2 Net Cash Flow 878.6-4,029.2 3,686.0-498.2 Opening Cash 4,256.1 5,134.8 3,321.2 3,904.0 Closing Cash 5,134.8 3,321.2 3,904.0 3,121.3 Balance sheet Crore ( Crore) FY13 FY14 FY15 FY16E Liabilities Equity Capital 389.2 1,525.9 1,572.8 603.6 Pref shares 1,971.1 1,155.6 2,015.7 984.3 Reserves & Surplus 6,888.9 6,095.2 4,305.8 4,356.7 Shareholders Funds 9,249.3 8,776.7 7,894.2 5,944.6 Minority Interest 1,720.0 2,008.6 1,765.5 1,644.0 Total Loans 42,004.2 45,040.7 47,738.3 49,154.5 Deferred Tax Liab. -2.7 28.7 54.3 10.1 Source of Funds 52,971 55,855 57,453 56,753 Assets Gross Block 29,251.3 39,789.3 43,631.0 45,721.7 Less: Acc. Depr. 5,177.9 6,150.0 7,962.5 10,228.7 Net Block 24,073.4 30,178.1 35,668.5 35,493.1 Capital WIP 19,178.3 15,733.8 12,154.0 12,154.0 Net Fixed Assets 43,251.7 45,912.0 47,822.5 47,647.1 Goodwill on consolidation 3,261.8 3,461.2 3,608.1 4,162.1 Investments 282.8 879.6 1,412.7 1,974.1 Inventories 270.4 358.9 304.9 469.3 Trade Receivables 1,869.0 1,771.9 1,721.4 2,511.5 Cash 5,134.8 3,321.2 3,904.0 3,121.3 Loans & Advanaces 9,688.2 9,392.6 7,950.7 7,214.9 Total Current Asset 16,962.6 14,844.6 13,881.0 13,317.0 Current Liab. & Prov. 10,788.1 9,242.5 9,271.5 10,347.7 Net Current Asset 6,174.4 5,602.1 4,609.5 2,969.3 Misc Expenditure 0.0 0.0 0.0 0.0 Application of funds 52,971 55,855 57,453 56,753 Key ratios FY13 FY14 FY15 FY16E Per share data ( ) EPS NM NM NM NM Cash EPS 2.9 1.0-0.6 0.2 BV 18.7 5.0 3.7 8.2 DPS 0.0 0.0 0.0 1.0 Operating Ratios (%) EBITDA Margin 30.0 29.5 28.3 38.8 PBT Margin 4.8 3.2 NM NM PAT Margin NM NM NM NM Inventory days 12 13 13 13 Debtors days 82 76 71 71 Creditors days 434 420 374 327 Return Ratios (%) RoE NM NM NM NM RoCE 3.2 2.6 1.9 4.3 RoIC 3.6 2.7 2.0 4.5 Valuation Ratios (x) P/E NM NM NM NM Net Sales/Total Asset 0.2 0.2 0.2 0.2 EV / EBITDA 22.9 37.4 39.5 16.4 EV / Net Sales 6.9 11.0 11.2 6.4 Price to Book Value 1.7 6.5 8.7 4.0 Solvency Ratios Debt/EBITDA 14.9 16.3 17.2 10.8 Debt / Equity 4.0 4.8 5.6 7.7 Current Ratio 1.6 1.6 1.5 1.3 ICICI Securities Ltd Retail Equity Research Page 4

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ICICI Securities Ltd Retail Equity Research Page 6