When Will GMR Airports Limited (NSE:GMRINFRA) Breakeven?

With the business potentially at an important milestone, we thought we'd take a closer look at GMR Airports Limited's (NSE:GMRINFRA) future prospects. GMR Airports Limited operates and develops airports in India. The ₹836b market-cap company posted a loss in its most recent financial year of ₹5.6b and a latest trailing-twelve-month loss of ₹8.6b leading to an even wider gap between loss and breakeven. Many investors are wondering about the rate at which GMR Airports will turn a profit, with the big question being “when will the company breakeven?” In this article, we will touch on the expectations for the company's growth and when analysts expect it to become profitable.

See our latest analysis for GMR Airports

Consensus from 3 of the Indian Infrastructure analysts is that GMR Airports is on the verge of breakeven. They anticipate the company to incur a final loss in 2025, before generating positive profits of ₹5.6b in 2026. So, the company is predicted to breakeven approximately 2 years from today. 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 105% year-on-year, on average, which is extremely buoyant. If this rate turns out to be too aggressive, the company may become profitable much later than analysts predict.

We're not going to go through company-specific developments for GMR Airports given that this is a high-level summary, but, take into account that typically a high forecast growth rate is not unusual for a company that is currently undergoing an investment period.

One thing we would like to bring into light with GMR Airports is it currently has negative equity on its balance sheet. Accounting methods used to deal with losses accumulated over time can cause this to occur. This is because liabilities are carried forward into the future until it cancels. Oftentimes, losses exist only on paper but other times, it can be a red flag.

Next Steps:

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

1. Valuation: What is GMR Airports 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 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’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.