Analysts Expect Breakeven For GMR Airports Infrastructure Limited (NSE:GMRINFRA) Before Long

GMR Airports Infrastructure Limited (NSE:GMRINFRA) is possibly approaching a major achievement in its business, so we would like to shine some light on the company. GMR Airports Infrastructure Limited operates and develops airports in India. The ₹487b market-cap company posted a loss in its most recent financial year of ₹1.8b and a latest trailing-twelve-month loss of ₹8.7b leading to an even wider gap between loss and breakeven. Many investors are wondering about the rate at which GMR Airports Infrastructure will turn a profit, with the big question being “when will the company breakeven?” We've put together a brief outline of industry analyst expectations for the company, its year of breakeven and its implied growth rate.

Check out our latest analysis for GMR Airports Infrastructure

According to the 2 industry analysts covering GMR Airports Infrastructure, the consensus is that breakeven is near. They expect the company to post a final loss in 2025, before turning a profit of ₹3.6b in 2026. The company is therefore projected to breakeven around 2 years from now. How fast will the company have to grow each year in order to reach the breakeven point by 2026? Working backwards from analyst estimates, it turns out that they expect the company to grow 88% year-on-year, on average, which signals high confidence from analysts. If this rate turns out to be too aggressive, the company may become profitable much later than analysts predict.

Underlying developments driving GMR Airports Infrastructure's growth isn’t the focus of this broad overview, but, take into account that by and large a high growth rate is not out of the ordinary, particularly when a company is in a period of investment.

One thing we would like to bring into light with GMR Airports Infrastructure is its debt-to-equity ratio of over 2x. Generally, the rule of thumb is debt shouldn’t exceed 40% of your equity, and the company has considerably exceeded this. A higher level of debt requires more stringent capital management which increases the risk around investing in the loss-making company.

Next Steps:

This article is not intended to be a comprehensive analysis on GMR Airports Infrastructure, so if you are interested in understanding the company at a deeper level, take a look at GMR Airports Infrastructure's company page on Simply Wall St. We've also put together a list of important aspects you should further research:

1. Valuation: What is GMR Airports Infrastructure worth today? Has the future growth potential already been factored into the price? The intrinsic value infographic in our free research report helps visualize whether GMR Airports Infrastructure is currently mispriced by the market.
2. Management Team: An experienced management team on the helm increases our confidence in the business – take a look at who sits on GMR Airports Infrastructure’s board and the CEO’s background.
3. Other High-Performing Stocks: Are there other stocks that provide better prospects with proven track records? Explore our free list of these great stocks here.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.