gmr airport infra Ppt_FIN 6022_Group 9.pdf

fsa ppt on gmr infra

1. Strategic Financial
Analysis of GMR Infra:
Performance, Risks, and
Sustainability
Group_09

2. Primary
Activities
Construction business, including Engineering,
Procurement, and Construction (EPC) contracting activities.
Development, maintenance, and operation of airports
Generation of power
Coal mining and exploration activities
Development of highways.
Development, maintenance, and operation of special
economic zones (SEZs)

3. Porter’s 5
Forces
Threat of
New
Entrants
Low
Bargaining
Power of
Suppliers
Moderate
to High
Bargaining
Power of
Buyers
High
Threat of
Substitutes
Moderate
Industry
Rivalry
High

4. P
Political: High impact due to regulatory
and policy influences.
E
Economic: High impact due to economic
conditions and investment factors
S
Social: Moderate to high impact from
travel trends and population growth.
T
Technological: High impact due to the
need for innovation and upgrades.
E
Environmental: High impact due to
sustainability and climate considerations
L
Legal: High impact from regulatory
compliance and potential legal challenges.
PESTEL
Analysis

5. SWOT Analysis
S W O T
Expertise: Experienced in
large-scale airport
projects.
Partnerships: Strong ties
with government and
international
stakeholders.
Diversification: Presence
in multiple regions and
project types.
Efficiency: Advanced
operational technologies.
Capital Needs: High
financial investment
required.
Regulatory Dependence:
Complex approval
processes.
Project Delays: Risks of
delays and cost overruns.
Economic Sensitivity:
Affected by economic
downturns.
Growing Demand:
Increasing global travel
needs.
Tech Advancements: New
technologies for
improved services.
Emerging Markets:
Expansion in developing
regions.
Sustainability: Adoption
of green technologies.
Economic Fluctuations:
Impact on travel
demand.
Regulatory Changes:
Potential changes in
regulations.
Competition: Intense
industry rivalry.
Environmental Risks:
Climate change impacts.

6. Key Financial Ratios

7. Key Financial Ratios

8. DuPont Analysis
1. Net Margin:
Trend: Negative but improving from -0.50 in 2019 to -0.06 in 2024.
Insight: The company has been operating at a loss, but losses are
gradually decreasing.
2. Total Asset Turnover:
Trend: Low and fluctuating, with improvement from 0.07 in 2021 to
0.18 in 2024.
Insight: The company’s efficiency in using assets to generate sales has
been weak but is improving.
3. Equity Multiplier:
Trend: Highly volatile, peaking at 215.51 in 2020 and turning
negative (-55.98) in 2024.
Insight: The company is heavily leveraged, indicating high financial
risk, especially with the negative equity multiplier in 2024.
4. Return on Equity (ROE):
Trend: Negative throughout but improves to a positive 0.64 in
2024.
Insight: The company has been struggling to generate returns on
equity, though recent years show a positive shift.

9. The company has shown financial
improvement over the years, particularly in
EBIT, market capitalization, and sales efficiency.
However, the persistent negative retained
earnings ratio and the overall "Distressed"
classification indicate ongoing financial risks.
The improvement in Altman’s Z-Score suggests
that the company is moving in the right
direction, though it remains in a precarious
financial position.
Altman Z-Score

10. The KZ Index indicates that the company
experienced varying degrees of financial
constraints over the years, with the most
significant constraints in March 2020 (KZ Score:
12.61).
By March 2024, the company's financial
constraints appear to have significantly reduced,
as reflected in the negative KZ Score (-12.64).
The Market Cap shows strong growth, particularly
from 2022 to 2024, reflecting positive market
sentiment or improved financial performance.
Despite the positive trends in market cap and
cashflows, the negative Tobin’s Q in March 2024
may suggest underlying concerns in asset
valuation or market perception
KZ Index

11. Revenue Recognition
KEY ASPECTS OF REVENUE RECOGNITION
Revenue Streams
Performance Obligations
Contract Balances
Aeronautical Revenue
Non-Aeronautical Revenue
Construction Revenue
Satisfaction Over Time
Satisfaction at a Point in Time
Contract Assets
Contract Liabilities

12. ESG and CSR Initiatives
ESG Committee
Climate Action: Delhi Airport became one of Asia's first Net
Zero certified airports under ACI’s Level 5 program, ahead
of its 2030 target. Both Delhi and Hyderabad Airports now
use 100% clean electricity, saving over 150,000 tons of CO2.
Waste and Air Quality Management: GMR Infra is
advancing waste management for plastic-free airports and
enhancing air quality by transitioning to electric vehicles
and expanding EV infrastructure.
Sustainability Reporting: GMR Infra is enhancing
transparency and stakeholder engagement through strong
ESG reporting, including gap assessments, benchmarking,
and risk evaluations.
CSR Spending: The company contributed
₹19.86 crore towards CSR activities during
the reporting year through the GMR
Varalakshmi Foundation
CSR Policy: The CSR policy of GMR Infra is
driven by the group's vision to make a
positive impact on society by contributing to
the economic development of the country
and improving the quality of life of local
communities

13. The average Interest Cover Ratio over the last 5 years is 0.38, indicating
potential difficulties in covering interest expenses with earnings before
interest and taxes.
Red
Flags
GMR Airports Infrastructure Ltd. has a negative networth of - ₹2164.16
crores.
The promoters have pledged 27.7% of their holdings as security towards
loan facilities sanctioned to group.
The asset turnover ratio has been significantly low over the past 5 years
with an average of 0.14.
There is a huge increase in the revenues of the company in FY 2024 but still
the company has incurred a loss.

14. Thank You