Key Financial Performance Q1 FY27

Consolidated Performance:

  • Revenue from operations: ₹4.5 billion, up 20.6% YoY
  • System-wide sales: ₹8.4 billion, up 18% YoY
  • Profit After Tax (PAT): ₹1.3 billion, up 35.6% YoY
  • PAT margin: 28.5% (vs 25.3% in Q1 FY26)
  • EBITDA: ₹1.6 billion, up 11% YoY
  • EBITDA margin: 35.8% (moderated from previous periods)

Margin Analysis:

  • Reported gross profit: ₹3.9 billion with gross profit margin of 85.7%
  • Adjusted for lounge aggregation cost reclassification (₹223 million from other expenses to cost of sales):
  • Adjusted gross profit: ₹3.65 billion
  • Adjusted gross profit margin: approximately 81%

Other Income:

  • Included benefit of ₹131 million from write-back of GST provision following favorable rectification order

Operational Highlights

Network Expansion:

  • System-wide footprint: 580 travel QSR outlets and lounges across 21 airports
  • Brand portfolio: 153 brands
  • Added 87 travel QSR outlets and 2 lounges in past 12 months
  • Key additions at Mumbai, Delhi, Hyderabad, Cochin, Navi Mumbai, and Noida airports

Like-for-Like Performance:

  • System-wide LFL sales growth: 0.8% for the quarter
  • Excluding affected markets (Mumbai, Guwahati, South India): LFL sales growth approximately 7% YoY
  • Consolidated LFL sales growth: 4.2%
  • Net contract gains: 20.2%

New Operations:

  • Commenced operations at Noida International Airport
  • Launched passenger services at Noida under Elite Assist brand (meet-and-greet, porter services)
  • Successful launch of second lounge in Hong Kong in January 2026

Passenger Traffic Context

  • Overall passenger traffic broadly flat YoY for the quarter
  • Domestic traffic: modest growth
  • International traffic: significant decline due to Middle East conflict
  • April: decline in overall traffic
  • May: gradual stabilization with domestic traffic returning to growth
  • June: renewed softening due to conflict-related disruptions
  • Highest ever single month of domestic air traffic in India recorded in May 2026

Cost Structure Analysis

Employee Costs:

  • Increased due to annual compensation revisions
  • Additional manpower for new outlets at Noida and Cochin airports (ramp-up phase)
  • Staffing for newly launched passenger services business at Noida Airport

Other Expenses:

  • Increased 22% YoY, in line with business growth
  • ₹223 million of lounge aggregation costs classified under other expenses
  • Higher pre-operating costs for units at Cochin, Delhi, and Noida airports

Balance Sheet Position

  • Debt-free balance sheet maintained
  • Consolidated cash balance: approximately ₹9.7 billion as of June 30, 2026
  • Substantial headroom to fund airport expansions, lounge and highway growth opportunities, and strategic initiatives

Joint Venture Performance

  • JV portfolio continues to ramp up across domestic and international markets
  • Expected to benefit further as operating conditions improve and new units mobilize
  • Growth impacted by Middle East exposure in western airports and contract transition timelines

Growth Catalysts and Outlook

Immediate Catalysts:

  • Bhogapuram Airport opening on August 17, 2026 (multiple outlets under JV GHL)
  • Over 50 outlets currently under development across network
  • Expected to provide meaningful uplift to revenue and earnings over coming 12-18 months

Traffic Recovery Expectations:

  • H2 FY27 expected to show strong bounce back in passenger traffic
  • Airlines planning restoration of long-haul international routes from September-October 2026
  • Current traffic trends similar to Q1 till August 2026

International Expansion:

  • Focus on Middle East and Asia markets
  • Entity established in Dubai for Middle East opportunities
  • Entity established in Indonesia for Asian opportunities
  • Successful expansion in Malaysia and Hong Kong

Contract Renewals and Transitions

  • Delhi T3 contract expires September 30, 2026
  • JV GHL has bid for new contract (results pending)
  • Chennai and Kolkata airports coming for renewal end of March 2027 and early Q1 FY28
  • Contract renewal rate currently at 92% (previously 94%) due to non-renewal of highway pilot outlets

Business Model Insights

Contract Maturity Timeline:

  • Existing airport terminals: 12-18 months to normalized profit levels
  • Greenfield airports: 18-24 months to normalized profit levels

Cost Structure:

  • 8-10% fixed costs (occupancy charges, CAM charges)
  • Labor costs semi-variable
  • Economies of scale through back-of-house efficiencies, procurement strategies, and manpower flexibility

Revenue Model:

  • Majority contracts based on minimum guarantee and/or revenue share
  • Typically exceed minimum guarantee payments
  • Revenue share percentages generally constant throughout contract life with minor escalations

Highway Business Strategy

  • Targeting government's wayside amenity (WSA) plan (approximately 1,000 sites)
  • Engaging with oil marketing companies and potential partner brands
  • Medium-to-long term opportunity with focus on financial return benchmarks
  • Calibrated approach to expansion

Management Commentary

  • Long-term drivers of Indian aviation remain intact: rising air travel penetration, expanding airport infrastructure, increasing connectivity, growing propensity to travel
  • Investments in new airports, outlets, lounges, and passenger services in early stages of ramp-up
  • Strong positioning to benefit from traffic recovery when it occurs
  • Discipline in capital allocation with focus on returns mimicking existing portfolio