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GMR Infrastructure (Rs60) BUYSet to take-off Target Price: Rs78

26 March 2010

Sector: Infrastructure Saurabh [email protected]

GMR Infrastructure Ltd is a large business conglomerate with presence across various verticals in the infrastructurespace, such as airports, power, road-highways and urban development. The company has an excellent trackrecord of execution across different segments, and is in a sweet spot with the pick-up in airport passengertraffic and improving visibility for monetization of real estate at premium valuations. It has a strong pipeline ofnew power projects which will be operational over the period and would unlock value for the parent company.We initiate coverage with a BUY rating and a price target of Rs78 based on SOTP (sum-of-the-parts) valuation.

Pick-up in airport passenger traffic: Driven by a revival in the economy, passenger traffic (PAX) growth at bothDelhi and Hyderabad airports has shown a strong rebound over the last six months, which would benefit DelhiInternational Airport Ltd. (DIAL) and Hyderabad International Airport Ltd. (HIAL), respectively. In view of theapproaching Commonwealth Games, improvement in the IT industry (prime driver of HIAL) and revival of theeconomy, we expect PAX traffic to show a CAGR of 10% at Delhi airport and 15% at Hyderabad airport over thenext three years. With the Hyderabad airport operating at around 60% capacity utilization and the Delhi airportscheduled to complete an incremental 34mn PAX capacity by March 2010; we believe a robust growth in PAXtraffic will provide operating leverage.

Roadmap for airport real estate monetization-a value creator: GMR Infra has development rights for largeparcels of real estate adjacent to the two airports (250 acres land for DIAL and 1,500 acres for HIAL). The recentdeal to monetize 45 acres of the total 250 acres at NPV of Rs330mn per acre has provided visibility for theremaining land bank and added significant value. Accordingly, we have valued the DIAL real estate at Rs20 pershare-250 acres of land at an NPV of Rs330mn per acre.

Massive scale-up in power portfolio: GMR Infra has a strong pipeline of new power projects totaling ~8,000 MW,of which ~4000 MW are in advanced stages of development. On the international front, the company has acquireda 50% stake in InterGen NV, with operational capacity of 7,658 MW, and 100% stake in Island Power, having alicense to own and operate up to 800 MW. Post the completion of all these projects, GMR Infra, will have amassive, diversified (domestic and international) power portfolio.

Value-unlocking of the energy business on the cards: GMR Infra had contemplated to raise funds for GMREnergy in 2008; however, that is yet to materialize. Hence, going forward, we believe the company will take theIPO route to raise funds which could unlock value for the parent company.

Initiate with BUY rating: We initiate coverage on the stock with a BUY rating and a price target of Rs78 per sharebased on SOTP valuation method. We have valued the company on SOTP using DCF methodology for most of theassets. Accordingly, we have arrived at a value of Rs78 per share comprising Rs40 (51% of SOTP) for airports, Rs27(35% of SOTP) for power & coal mining, Rs6 (8% of SOTP) for roads, and the balance representing cash. In ourSOTP valuation, we have not factored in projects which are still in the planning stage. In our price target, 40% ofthe total value is contributed by operational projects and the remaining 60% comes from projects which are atvarious stages of development.

GMR Infra (Consolidated) In Rs. Mn FY09 FY10E FY11E FY12E FY13EReuters/Bloomberg Code GMRI.BO/GMRI.IN Net Sales 40,192 42,214 49,310 58,284 83,840Market Cap. (Rsbn) 220 EBIDTA 10,668 14,412 18,203 23,303 37,819Market cap. (US$bn) 4.8 Adj. Net Profit 2,795 972 1,868 3,611 10,931Shares Outstanding (mn) 3,667 Adj. EPS 0.76 0.26 0.51 0.98 2.9852-week High/Low (Rs) 92/34 EPS Growth % 33 (65) 92 93 203

EBIDTAM% 23.8 30.4 30.7 33.4 38.8NPM% 6.2 2.1 3.2 5.2 11.2PER (X) 79 226 118 61 20

Major Share Holders (%) P/BV (x) 1.7 3.3 3.3 3.1 2.7Promoter/Majority 74.6 Price/sales (x) 4.9 4.6 3.7 3.2 2.3FIIs 9.5 EV/EBIDTA 28.4 25.7 22.8 19.5 12.6Banks/Fis/MFs 8.1 ROCE (%) 5.2 5.2 5.8 6.7 9.8Public & others 7.8 ROE (%) 4.3 1.5 2.8 5.1 13.3Source: Company and Karvy Estimates

Sanjeev [email protected]

Amit [email protected]

22

Investment positives

DIAL: Completion of Phase I at opportune and record time

The DIAL Phase I development is on schedule and expected to becompleted in record time of 37 months, by March 2010, which issignificantly lesser than the execution period for other internationalairports. Post the completion of Phase I, the overall passenger capacitywould increase by 34mn to 60mn. The Delhi airport is the second-biggestin India, accounting for around 21% of the all-India traffic (PAX of ~23mnin FY09). During FY09, the passenger traffic saw de-growth due to theglobal economic recession. The passenger traffic at Delhi airport haswitnessed a CAGR of 17% from FY05-09. We expect the passenger trafficto be robust over the next three years and to show a CAGR of 10% drivenby the economic revival and the Commonwealth Games. We believe thecapacity addition coupled with pick-up in demand will increase the non-aero revenue. Using DCF, we have valued the core assets of DIAL atRs59bn, yielding Rs31bn (Rs8.7 per share) for GMR's 54% stake in DIAL.

Airport Pax capacity (mn) Months to completeChangi Airport 22 76T5: Heathrow 25 60T3: Beijing 45 60T3: IGI (Delhi) 34 37Source: AAI, Company & KSBL Research

Pick-up in passenger traffic at HIAL will provide operating leverage

HIAL commenced commercial operations in March 2008, but was unableto get the benefit of expanded capacity due to the slowdown in passengertraffic. HIAL's passenger traffic grew at 15% during FY04-08. However, inFY09, passenger traffic fell due to slowdown in the IT industry coupledwith sharp hike in air-fares because of UDF (user development fee). Butpassenger traffic has shown a strong recovery over the past six months,and we expect a growth of 15% over the next three years. We believe thatgrowth in passenger traffic will provide the operating leverage as capexhas been undertaken for 12mn passengers and the current passenger trafficis only 6.3mn.

Passenger Traffic Trend at HIAL

Source: AAI, Company & KSBL Research

(mn)

1.20

1.30

1.40

1.50

1.60

1.70

1.80

1.90

Q1FY08 Q2FY08 Q3FY08 Q4FY08 Q1FY09 Q2FY09 Q3FY09 Q4FY09 Q1FY10 Q2FY10 Q3FY10

3Roadmap for monetization of prime real estate-a value creator

GMR's real estate valuation primarily comes from the 250 acres landadjacent to the Indira Gandhi International Airport, New Delhi. The recentdeal to monetize 45 acres of the total 250 acres at NPV of Rs330 mn peracre has provided visibility for the remaining land bank and addedsignificant value. Accordingly, we have valued the DIAL real estate atRs19.7 per share-250 acres of land at an NPV of Rs330 mn per acre. Theother land parcels comprising 1,500 acres near Rajiv Gandhi InternationalAirport, Hyderabad and the 2,000 acres at GMR Krishnagiri SEZ are valuedat Rs3.2 per share, resulting in a consolidated real estate value of Rs23per share of the GMR Infra stock price.

Monetization of 45 acres at DIAL

Total (Rs mn) GMR's share (Rs mn) % share

Net Upfront Deposit 14,715 7,946 54%Infrastructure Deposit 6,732 3,635 54%NPV of Lease Rentals 11,137 3,252 29%Total 32,584 14,833Source: Company & KSBL Research

Massive scale-up in the power business

GMR Infrastructure has a strong pipeline of new power projects totaling~8,000 MW, of which ~4,000 MW are in advanced stages of development.On the international front, the company has acquired a 50% stake inInterGen NV, with operational capacity of 7,658 MW, and 100% stake inIsland Power, Singapore, having a license to own and operate up to 800MW. It has acquired coal mining assets internationally-100% stake in PTBarasentoso Lestari, Indonesia and 38.5% stake in Homeland EnergyGroup (HEG)-to mitigate coal-availability issues and fluctuating coal-price risks. We believe that owning mining assets abroad is a huge positivefor the company, considering the visible shortage of coal in India.

Unlocking of the energy business on the cards

GMR had contemplated to raise fund for its subsidiary, GMR Energy in2008; however, this is yet to materialize. Hence, going forward, we believethat the company will take the IPO route to raise funds which could unlockvalue from the energy business for the parent company.

Financial Year 2009 2010 2011 2012 2013 2014 2015 2016

1,240

2,900

1,370

2,000

768

15

16

0

Total ( in MW) 809 823 838 1606 3,606 4,976 7,876 9,116

Gradual capacity addition expected

in MW from FY 2010 to 2016

Planned power generation capacity addition ( India & Nepal)

Source: Company & KSBL Research

4Ample opportunities in roadways

GMR has a portfolio of six BOT projects-three based on toll collectionand three based on annuity-worth Rs22.7bn. The company has recentlywon two projects, one on toll and one on annuity. Looking at factors likethe government thrust on road development, strong political commitment,and easing liquidity with expected revision in framework for projects, webelieve that road development projects are on a steep growth trajectoryand would offer immense opportunity for GMR. We have valued the totalvalue to GMR from annuity roads and toll roads at Rs6 bn and Rs16.6 bn,respectively. Therefore, the total equity value of road assets is Rs22.7 bn,representing Rs6.2 per share.

SOTP valuation provides upside of 29%

We have valued the company based on DCF valuation as most projectsare long term and have a fixed concession period with strong predictablityof cash flows. Hence, the value of these projects would be best capturedby discounting the future cash flows. We have used a varied cost of equityacross projects to factor-in the differential business and execution risks.For instance, the cost of equity has been assumed at 12% for airports and15% for realty. For power, the cost of equity has been considered in therange of 10-15% depending on factors, such as proportion of merchantpower and the stage of development. For roadways, the cost of equity isassumed to be 11% for annuity-based and 13% for toll-based projects.Accordingly, we have arrived at an intrinsic value of Rs78 per sharecomprising Rs40 (51% of SOTP) for airports, Rs27 (35% of SOTP) forpower & coal mining, Rs6 (8% of SOTP) for roads, and the balancerepresenting cash. In our SOTP valuation, we have not factored in projectswhich are still in the planning stage. In our price target, 40% of the totalvalue is contributed by operational projects and the remaining 60% comesfrom projects which are at various stages of development.

Revenue collection Rs mn/month (as on Dec09)

Source: Company, KSBL Research.

67

49

89

14

35

51

0

1020

30

4050

60

70

8090

100

Tambaram-Tin Tuni - Ana Pochanpalli Ambala-Chand Jadcherla Ulundurpet

Annuity Toll

5SOTP Valuation (Rsmn)

Airports Asset Value GMR's stake Value of Stake Rs/share

DIALCore 59,088 54% 31,908 8.7DIAL Real estate 72,272 19.7HIALCore 45,355 63% 28,574 7.8HIAL Real estate 10,800 2.9SGIA 8,320 40% 3,328 0.9TOTAL AIRPORTS 112,764 146,881 40

POWER MW Equity Value GMR's stake Value of Stake Rs/shareGMR Energy Limited 220 7574 100% 7,574 2.07GMR Power Corporation Pvt. Ltd 200 9534 51% 4,862 1.33Vemagiri Power Generation Ltd 389 8174 100% 8,174 2.23GMR Kamalanga Energy Limited 1,400 15,657 80% 12,526 3.42Vemagiri (Expansion) 768 18,985 100% 18,985 5.18Emco Energy 600 2,286 100% 2,286 0.62GMR Energy,Chattisgarh 1,370 2,705 100% 2,705 0.74Coastal Andhra Pradesh 2,000 11,233 100% 11,233 3.06Badrinath, Alaknanda 300 55 100% 55 0.02Total Power 9087 76,202 12.11 68,399 19INTERGEN 6,254 32226 50% 16,113 4.4

Valuation- Mining Assets MR Mn Tons Equity Value Stake (%) Value of Stake Rs/sharePT Barasentosa Lestari, Indonesia 104 3,111 100% 3,111 0.8Homeland Energy Group Ltd 621 28,131 39% 10,831 3.0Mining asset value/share (Rs ) 3.8Total Power & Mining 27

Project Name Route Length (km) Project Value Stake (%) Value of stake Rs/shareTambaram-Tindivanam (Tamil Nadu) 93 2,041 74% 1,510.4 0.4Tuni - Anakapalli (Andhra Pradesh) 59 2,711 74% 2,006.1 0.5Adloor-Gunla-Pochanpalli (Andhra Pradesh) 103 2,543 100% 2,543.1 0.7Ambala-Chandigarh (Punjab) 35 (15) 100% (15.2) (0.0)Faruknagar-Thondapalli-Jadcherla (Andhra Pradesh) 58 6,165 100% 6,164.5 1.7Tindivanam-Ulundurpet (Tamil Nadu) 73 10,521 100% 10,521.4 2.9Total roadways 421 22,730.4 6.2Others 0.5PRICE TARGET 78Source: Company, KSBL Research.

6Background and Business Model

GMR Infrastructure is a large business conglomerate with a strong presenceacross various verticals in the infrastructure space, both within and outsideIndia. It has an excellent track record of execution across different segmentslike road-highways, airports, power and urban development. Its zealremains to forge into large opportunities in the infrastructure space. Thecompany's proven execution record along with strong balance sheet willgive further impetus to growth, in our view.

Source: Company Presentation, KSBL Research.

FY10Airport Delhi T3 Turkey

Highways Ulundurpet -

Tindivanam

FY12Energy Kamalanga Vemagiri Expansion EMCO

2,418 MW

1,200 MW210 kms

FY14Energy Coastal Power

Plants Alaknanda Talong

2,460 MW

FY15Energy Bajoli Holi Upper Karnali Upper Marsyangdi

730 MW

54 mn PAX73 kms

FY13Energy Chhattisgarh

Highways Hyderabad-Vijayawada Chennai-Outer ring road

Airports(2)

Energy(13)

Highways(8)

72 mn PAX 7,631 MW 631 kms

HyderabadDelhi

Coal 4Gas 3Liquid fuel 1Hydro 5

Annuity4Toll4

Intl.(2)

25 mn PAX800 MW

TurkeyIsland Power

Mar 2015

Mar 2009Airports(2)

Energy(3)

Highways(5)

Intl.(1)

38 mn PAX 823 MW 348 kms 5 mn

HyderabadDelhi Ph IA

Gas 1Liquid fuel 2

Annuity3 Toll2

Turkey

GMR Infrastructure Limited (GIL)ENERGY ROADS AIRPORT

GMR Tambaram-Tindivanam ExpresswaysPrivate Limited (GTTEPL) - 93 KMs

GMR Tuni-Anakapalli Expressways PrivateLimited (GTAEPL) - 59 KMs

GMR Ambala-Chandigarh ExpresswaysPrivate Limited (GACEPL) -35 KMs

GMR Jadcherla Expressways Pvt Limited(GJEPL) - 58 KMs

GMR Pochanpalli Expressways PrivateLimited (GPEPL) - 103 KMs

GMR Ulundurpet Expressways PrivateLimited (GUEPL) - 73 KMs

GMR Power Corporation Private Limited(GPCL) 200 MW

Delhi International Airport Private Limited (DIAL)

51.0%

Sabiha Gokcen International Airport (SGIA),Istanbul, Turkey

Delhi Aerotropolis (DAPL) 54%GMR Hyderabad International AirportLimited (GHIAL)

OTHERS

63%

Hyderbad - Vijaywada (GHVEPL)181 kms

Hyderabad Aerotropolis (GHAPL)

100%

100 %

100 %

89 %

100 %

51 %

100 %

74 %

74 %

100 %

100 %

100 %

100 %

100 %

63 %

54 %

40 %

GMR Energy Limited (GEL) 235 MW

Vemagiri Power Generation Limited-(VPGL) 388.5 MW + 768 MW

GMR Energy Trading Limited

GMR Chattisgarh Energy 1200 MW

GMR Mining and Energy Pvt Limited

GMR (Badrinath) Hydro Power Generation Pvt Limited (GBHP) 300 MW

GMR Kamalanga Energy Limited 1050 MW

100 %Emco Energy 600 MW

100 % GMR Bajoli Holi Hydro Power

100 % GMR Londa Hydro Power160 MW

100 % GMR Upper Karnali HydropowerLtd 300 MW

100 % Himatal Hydropower Company250 MW

180 MW

Chennai Outer Ring (GCOREPL)-30 KMs

100 %

Hyderabad Aviation SEZ (GHASL) 63%

100%GMR Aviations Private Limited (GAPL)

GMR Krishnagiri SEZ Limited100%

7Airports: Blend of growth and opportunity

India's fast-growing economy has seen an unprecedented increase inpassenger and cargo traffic over the last decade. This has stretched thecurrent capacity and prompted the government to take on an ambitiousprogram to modernize existing airports and building new greenfieldones. The government is considering proposals for five new airportsand the development of 35 non-metro airports. We believe the company'sexpertise in the airport segment would provide the synergy to win newprojects. GMR currently has a portfolio of three airport assets, two ofwhich are in India (New Delhi and Hyderabad) and one in Turkey(Sabiha Gokcen International Airport, Istanbul). The Hyderabad airport,a greenfield project, was completed in March 2008. On the other hand,the Delhi and Sabiha Gokcen international airports are brownfieldprojects. We have valued GMR's airports' core business at Rs64 bn,based on FCFE valuation method, given the steady and recurring cashflow during the concession period. GMR's airports' core assets contribute22.5% of our SOTP. If we include the value of real estate developments,the airport assets accounts for 51% of our SOTP.

Airport PortfolioStake Capex (Rs bn) Project status Passenger Development rights

traffic (mn)

Delhi Airport 54% 89.8 Expected April'2010 22.9 250 acre landHyderabad Airport 63% 29.2 Phase I operational 6.20 1500 acres landSabiha Gokcen Airport 40% 29.3 Operational 4.83 N/A

Valuation details (Rsmn)Airports Asset GMR's Value of Value/ Project Equity

Value stake Stake share cost contributi COE Method

DIALCore 59,093 54% 31,910 8.7 89,754 12,500 12% DCFReal estate 72,272 19.7 15%GHIALCore 45,355 63% 28,574 7.8 29,200 3,780 12% DCFReal estate 10,800 2.9 15%SGHIA 9,437 40% 3,775 1.0 29,315 2,990 12% DCFTOTAL AIRPORTS 113,885 135,429 37Source: Company, KSBL Research.

8Delhi International Airport (Pvt) Limited: Time to dial-in

DIAL,a consortium comprising GMR Infrastructure,AAI (Airports Authorityof India), Fraport AG and Eraman Malaysia, has been awarded the projectto modernize, develop and operate the Delhi international airport. Thisinvolves managing a capacity of 100 million for a concession period of 60years. The Delhi airport is one of the busiest in India, with a passengercapacity of 23 mn in FY09, equivalent to around 21% of total passengertraffic in the country. New Delhi is a hub for economic activity around thenorthern regions of India and is a popular transit point and destinationfor tourist traffic. We believe this will maintain the momentum in passengertraffic over the longer-term period.

Key features

Pay 45.99% of revenue to AAI: According to the revenue-sharingarrangement, DIAL will pay 45.99% of the revenue to AAI, besides anupfront fee of Rs1.5bn to the Authority for the right to develop the airport.

Concession period: The concession period is for 30 years, and is extendableby another 30 years at the option of the airport.

First right of refusal for any airport within 150 km: During the concessionperiod, GMR will have the first right of refusal to develop any new airportwithin an area of 150 km as long as its bid is within 10% range of thehighest bidder.

Assured return of 11.6% on aeronautical revenue: DIAL is assured of an11.6% post-tax return on net-invested capital from FY11. The regulatedaero revenues would be calculated as follows: 11.6% return on regulatedasset base (90% of fixed assets less upfront fee less ADF) + depreciation(90% recovered) + operation & maintenance expenses (90%) + taxes onaero income (90%) - 30% of non-aero revenues. The regulated aero-revenues would be computed for each year in a five-year block (e.g.FY11-15), and its NPV would be worked out using an 11.6% discountrate. The aero charges (for five years) would then be set by AERA (AirportEconomic Regulatory Authority), such that DIAL is able to recover theNPV of targeted revenues for the five-year block under consideration. Webelieve this will provide stability to the company's cash flow.

Shareholders of DIAL StakeGMR Infrastructure Ltd 44.0%GMR Energy Ltd (100% subs) 10.0%Fraport AG 10.0%Malaysia Airports Holding 10.0%Airports Authority of India 26.0%

Core AirportInfrastructure

Land Bank


9Land-lease agreement: The Delhi airport is spread over 5,123 acres ofland. Of this, DIAL can develop 250 acres of land for commercial purposes.The lease period of this land is expected to run in line with the leaseperiod of the airport.

Project completion plan: The DIAL Phase I development is on scheduleand expected to be completed in record time of 37 months, by April 2010,which is significantly lower than the execution period for otherinternational airports. Post the completion of Phase I, the overall passengercapacity will increase by 34 mn to 60 mn. The plan is to eventually expandthe capacity to 100 mn passengers in a phased manner.

Project DetailsPhases Completion PAX capacity Cargo Cap. PTB Area

(mn) (tones) (Sq. m)

1A 31-Mar-08 26 539,000 110,9731-Jul-08 26 539,000 150,973

1B 31-Mar-10 60 638,000 515,0752 31-Mar-17 60 900,000 515,0753 31-Mar-22 76 1,400,000 976,0174 31-Mar-27 86 2,100,000 1,268,2775 31-Mar-37 100 3,600,000 1,679,844Source: Company, KSBL Research.

Financing of Phase I: The total project cost for the Phase-I expansion isexpected to be Rs89.7 bn. The project is being funded through Rs49bndebt, Rs24.5bn equity (including deposits of Rs12.5 bn made by promotersto be converted into equity), Rs18.27bn Airport Development Fee (ADF),Rs7 bn deposits from realty, and the balance through internal accruals.

Funding

Capex Funding Rs mn

Debt 49,863Equity+ Shareholders Adv 12,500+12,000Internal Accruals 294Deposit from Real Estate deals 8,827ADF 18,270Source: Company, KSBL Research.

10

Phase I completion at opportune time

The Delhi Airport is the second-largest airport in India, accounting foraround 21% of the all-India traffic (PAX of ~23 mn in FY09). During FY09,the passenger traffic saw de-growth due to the global economic recession.The passenger traffic at the Delhi airport has witnessed a CAGR of 17%from FY05-09. We expect passenger traffic to be robust and to and toshow a CAGR of 10% over the next three years driven by the economicrevival and the upcoming Commonwealth Games.

Growth driver-regulated as well as market-linked: DIAL will earn broadlythree types of revenue streams: aeronautical, aero-related and non-aeronautical revenues. Aero revenues are a composition of landing revenue,passenger service fee, aircraft parking charge and X-ray charge, all of whichare regulated by the AAI. The aero-related and non-aero revenues compriserevenues mainly from ground handling, fuel farm, duty-free, food &beverages, advertising, and car parking and rentals, which are linked torental and customer spends. Since the aeronautical revenues are cappedby a fixed formula, we believe, going ahead, the contribution of non-aerorevenue will increase in the revenue mix and drive growth.

Aeronautical Aero-related Non-aeronauticalAircraft Landing Charges: Ground Handling Airport Village RentPassenger Service Fees (PSF) Aviation Fuel Farm Cargo RentAircraft Parking Charges Office Space In Flight Kitchen RentX-Ray Charges Ware House Fuel Farm Rent

In-Flight Kitchen Ground HandlingHangers/ MRO Rent

Assumption sheet

DIAL FY09 Growth% (per annum)

Passenger Traffic (mn) 22.80 10% till FY13Air Traffic Movement (no.) 245,610 8% in Passenger ATM & 4%

in Cargo ATM till FY13Cargo Tonnage (ton) 426300 8% till FY13Duty free- Per intl passenger spend $10.00 15% till FY13Advertising (Rs/sq./month) 38719 8% till FY13Source: Company, KSBL Research.

Traffic at DIAL


-10%

-5%

0%

5%

10%

15%

20%

25%

30%

FY06 FY07 FY08 FY09 FY10E FY11E FY12E

PAX Air Traffic Movements Cargo Traffic movement

{Regulated

11

Revenue breakup (Rsmn)

Particulars FY 10 FY 11 FY 12 FY 13 FY 14 FY 15

Total Aero Revenue 4,096 7,000 9,100 11,830 14,788 18,484Total Aero related revenue 2,912 2,882 3,074 3,973 4,456 4,999Total Non Aero related revenue 3,772 6,729 7,806 8,722 9,634 10,598Gross Revenues 10,780 16,611 19,980 24,525 28,877 34,081Less: AAIs share (46%) 4,959 7,641 9,191 11,281 13,284 15,677Net Revenues to DIAL 5,821 8,970 10,789 13,243 15,594 18,404Aero (%) 38 42 46 48 51 54Non Aero (%) 62 58 54 52 49 46Source: Company, KSBL Research.

Financial trends-DIAL valued at Rs59 bn: We believe that DIAL's revenuewill show a 31% CAGR during FY11-15 and the revenue mix for aero andnon-aero will be 54:46 in FY15. Due to operating leverage, the EBIDTAmargin is expected to improve from 20% in FY08 to 41% in FY15. Bydiscounting our FCFE estimates explicitly over FY10-66 at 12.0%, we havevalued DIAL's core operations at Rs59 bn, which translates to Rs31 bn(Rs8.7 per share) for GMR's 54% stake in DIAL.

Valuation (Rs mn)

Cash flows to equity FY10 FY11 FY12 FY13 FY14 FY15-66

EBIDTA 2,803 5,087 6,630 9,279 11,343 1,120,326(Inc.)/Dec. in WC 2,557 103 64 99 85 2,305Less: Capex 29,525 - - - - 77,521Less: Interest 1,139 4,121 4,032 3,853 3,675 19,535Less: Tax - - - - 243 325,130Add: Debt 10,087 - - - - -Less: Repayment - - 1,904 1,904 1,904 44,152Add: ADF, Upfront dep or Adv. 29,697 - - - - 77,521FCFE 9,365 863 630 3,423 5,436 729,204

Present value of (FY10-14) 16,529Present value of (FY15-66) 42,559DIAL's value 59,088GMR'S stake 31,908Rs/share 8.7Risk free rate 8%Beta 1Risk Premium 4%Cost of Equity 12%Source: Company, KSBL Research.

12

BALANCE-SHEET 31-Mar-09 31-Mar-10 31-Mar-11 31-Mar-12 31-Mar-13 31-Mar-14 31-Mar-15

Equity Capital 24,500 24,500 24,500 24,500 24,500 24,500 24,500Reserves 928 1,289 953 (937) 1 2,938 7,439Net worth 25,428 25,789 25,453 23,563 24,501 27,438 31,939Loans 39,776 49,863 49,863 47,959 46,056 44,152 40,061Upfront Deposit on Real Estate 8,827 8,827 8,827 8,827 8,827 8,827ADF Capitalized 18,270 18,270 18,270 18,270 18,270 18,270Infra deposit on Real Estate 2,600 2,600 2,600 2,600 2,600 2,600Total 65,204 105,349 105,013 101,219 100,254 101,287 101,697Gross Assets(Including CWIP) 66,229 95,754 95,754 95,754 95,754 95,754 95,754Less: Accumalated Depreciation 664 1,966 3,269 7,757 12,244 16,732 21,220Net Fixed Assets 65,565 93,788 92,485 87,997 83,510 79,022 74,534Other Investments 553 553 553 553 553 553 553Cash 1,112 10,477 11,340 11,970 15,393 20,830 25,625Sundry Debtors 1,753 898 1,383 1,664 2,043 2,405 2,839Loans & Advances 1,470 1,470 1,470 1,470 1,470 1,470 1,470Less: Current Liabilities & Provisions 5,293 1,839 2,221 2,437 2,717 2,995 3,327Net Current Assets (2,028) 529 633 697 796 880 982Total 65,204 105,349 105,013 101,219 100,254 101,287 101,697

Financial trend (Rsmn)

P & L 31-Mar-09 31-Mar-10 31-Mar-11 31-Mar-12 31-Mar-13 31-Mar-14 31-Mar-15

Total Revenue 9,476 10,777 16,608 19,978 24,525 28,877 34,081AAI Revenue Share 4,406 4,957 7,640 9,190 11,281 13,284 15,677Net Revenues 5,070 5,820 8,968 10,788 13,243 15,594 18,404Operating costs 4,453 3,017 3,881 4,158 3,964 4,251 4,565EBITDA 617 2,803 5,087 6,630 9,279 11,343 13,838EBITDA Margin 12% 48% 57% 61% 70% 73% 75%Interest cost 539 1,139 4,121 4,032 3,853 3,675 3,429Depreciation 525 1,302 1,302 4,488 4,488 4,488 4,488PBT (342) 361 (336) (1,890) 938 3,180 5,922Tax 107 - - - - 243 1,421PAT (235) 361 (336) (1,890) 938 2,937 4,501Minority Interest (117) 166 (155) (869) 431 1,351 2,070PAT after minority interest (118) 195 (182) (1,021) 506 1,586 2,431

13

Hyderabad International Airport (HIAL)

GMR HIAL (or GHIAL), a consortium of GMR Infrastructure, MalaysianAirports Holding Berhad, AAI and Government of Andhra Pradesh,developed a greenfield airport at Hyderabad, which commencedcommercial operations in March 2008. The project involved developingthe airport to manage a capacity of 40 million passengers (current capacity12 mn) for a concession period of 60 years. GHIAL has the same revenuestream as DIAL: aeronautical, aero-related and non-aeronautical.However, GHIAL has to share only 4% of the gross revenue with AAIfrom the 11th year. On the other hand, DIAL has to share 46% of therevenue from the first year of Phase-I completion. Moreover, the companyhas development rights of 1,500-acre land adjacent to the airport.

Key features

Deferred revenue share of 4%: In accordance to the revenue-sharingarrangement, HIAL will pay 4% of the revenue to AAI. However, therevenue sharing has been deferred for the first 10 years of operations,and the accrued amount is payable in the subsequent 10 years in 20equal half-yearly installments.

No competing airport within 150 km: The existing airport was shut downafter the commissioning of the new airport. No airport will be allowed tofunction within 150 km of GHIAL for 25 years from the commissioning ofthe airport.

Concession period: The concession period is 30 years from the airportopening date and the same is extendable by another 30 years at the optionof the airport.

Land-lease agreement: GHIAL received 1,500 acres of land on lease forcommercial development.

Project overviewConcession period 30 + 30 yearsPhases of development I, II, III & IVLand under development 5,500 acresUltimate pax capacity 40 mm (Current capacity of 12mm)Concession fee 4% of revenue (deferred payment basis from

11th year)Commercial operation 23 rd March 2008Master Planners Consortium comprising of Cowi of Norway, Avai

Plan of Denmark & Stup of MumbaiSource: Company, KSBL Research.

Shareholders of DIAL StakeGMR Infrastructure Ltd 63.0%Government of AP 13.0%Malaysia Airports Holding 11.0%Airports Authority of India 13.0%

14

Pick-up in passenger traffic at HIAL will provide operating leverage:HIAL commenced commercial operations in March 2008, but was unableto get the benefit of the expanded capacity due to slowdown in passengertraffic. HIAL's passenger traffic witnessed a 15% CAGR during FY04-08.However, during FY09, the passenger traffic fell due to slowdown in theIT industry coupled with sharp hike in air-fares because of UDF. But thepassenger traffic has shown strong recovery over the past six months,and we expect it to grow at 15% over the next three years. We believegrowth in passenger traffic will provide the operating leverage as capexhas been undertaken for 12 mn passengers and the current capacity is6.3 mn.

Assumption sheet

HIAL FY09 Growth % (per annum)

Passenger Traffic (mn) 6.2 15% till FY13Air Traffic Movement (no) 82639 8% in Passenger ATM & 4%

in Cargo ATM till FY13Cargo Tonnage (ton) 54245 26% till FY12Duty free - Per intl passenger spend $6 15% till FY12Advertising (Rs/sq./month) 15000 8% till FY12Source: Company, KSBL Research.

HIAL Revenue breakup (Rsmn)

Particulars FY 10 FY 11 FY 12 FY 13 FY 14 FY 15

Total Aero Revenue 2,619 3,100 3,660 4,269 4,676 5,123Total Aero related revenue 1,015 1,271 1,551 1,882 2,209 2,593Total Non Aero related revenue 1,394 1,710 2,097 2,309 2,578 2,815Gross Revenues (A+B+C) 5,028 6,081 7,308 8,460 9,462 10,531Less: AAIs share (4%) 201.1 243.2 292.3 338.4 378.5 421.2Net Revenues to GHIAL 4,827 5,838 7,016 8,122 9,084 10,109Aero 52 51 50 50 49 49Non Aero 48 49 50 50 51 51Source: Company, KSBL Research.

Traffic trend at HIAL


-20%

-10%

0%

10%

20%

30%

40%

50%

FY06 FY07 FY08 FY09 FY10E FY11E FY12E

PAX Air Traffic Movements Cargo Traffic movement

15

Valuation (Rsmn)

Cash flows to equity FY10 FY11 FY12 FY13 FY14 FY15-68

EBIDTA 2,291 3,146 4,158 5,587 6,387 1,771,927(Inc.)/Dec. in WC (172) (68) (88) (147) (211) 23,989Less: Capex 529 - - - - 46,000Less: Interest 2,152 2,011 1,853 1,694 1,536 34,597Less: Tax - - - - - 550,514Add: Debt - - - - - 30,668Less: Repayment 1,126 1,488 1,488 1,488 1,488 47,570FCFE (1,343) (285) 905 2,551 3,574 1,099,925

Present value of (FY10-14) 3,211Present value of (FY15-68) 42,310GHIAL's value 45,521GMR'S stake 28,678Risk free rate 8%Beta 1.0Risk Premium 4%Cost of Equity 12%Rs./share 7.8


Financial trends-HIAL valued at Rs45bn: We believe that revenue willshow a CAGR of 17% in FY10-13E and EBIDTA margin would improvefrom 36% in FY09 to 66% in FY13E. HIAL is expected to report a loss untilFY11 due to higher depreciation and interest in the initial stages post thecompletion. We have valued HIAL's core operation at Rs45bn bydiscounting our FCFE estimates explicitly over FY10-68 at 12.0%; thisyields Rs28.5bn (Rs7.8 per share) for GMR's 63% equity stake in HIAL.

16

Financial Trend (Rsmn)

P & L 31-Mar-09 31-Mar-10 31-Mar-11 31-Mar-12 31-Mar-13 31-Mar-14 31-Mar-15

Total Revenue 3,982 5,028 6,081 7,308 8,460 9,462 10,531AAI's Revenue share 163 201 243 292 338 378 421Net Revenue 3,819 4,827 5,838 7,016 8,122 9,084 10,109Operating costs 2,388 2,536 2,692 2,858 2,535 2,697 2,870EBITDA 1,431 2,291 3,146 4,158 5,587 6,387 7,239EBITDA Margin 36% 46% 52% 57% 66% 67% 69%Interest cost 1,592 2,152 2,011 1,853 1,694 1,536 1,782Depreciation 1,122 1,460 1,460 1,460 1,460 1,460 1,460PBT (1,181) (1,321) (325) 845 2,433 3,390 3,998Tax 19 - - - - - 680PAT (1,200) (1,321) (325) 845 2,433 3,390 3,318Minority interest (444) (489) (120) 313 900 1,254 1,228PAT after Minority Interest (756) (832) (205) 532 1,533 2,136 2,090

Balance-Sheet (Rsmn) 31-Mar-09 31-Mar-10 31-Mar-11 31-Mar-12 31-Mar-13 31-Mar-14 31-Mar-15

Equity 3,780 3,780 3,780 3,780 3,780 3,780 3,780Reserves 610 (711) (1,120) (359) 1,989 5,295 8,529Net worth 4,390 3,069 2,660 3,421 5,769 9,075 12,309Total Loans 23,979 22,853 21,366 19,878 18,390 16,902 22,748Total Liabilities 28,369 25,923 24,026 23,299 24,159 25,978 35,057Application of FundsGross Assets 28,671 29,200 29,200 29,200 29,200 29,200 40,200

Less: Accumalated Depreciation 1,197 2,657 4,117 5,577 7,037 8,497 9,957Net Fixed Assets 27,475 26,543 25,083 23,623 22,163 20,703 30,243

Investment in subsidiaries 132 132 132 132 132 132 132Cash 921 (422) (792) 29 2,496 5,986 5,769Inventories 120 419 507 609 705 788 877Sundry Debtors 688 419 507 609 705 788 877Loans & Advances 2,277 2,277 2,277 2,277 2,277 2,277 2,277Total current asset 3,085 3,115 3,290 3,495 3,687 3,854 4,032Less: Current Liabilities & Provisions 3,244 3,445 3,688 3,980 4,319 4,697 5,119Net Current Assets (158) (330) (398) (486) (632) (844) (1,087)Total Assets 28,369 25,922 24,025 23,298 24,159 25,977 35,057

17

Sabiha Gokcen (Istanbul) Airport

GMR Infrastructure won the competitive bid to operate Istanbul SabihaGokcen International Airport (SGIA), the second airport in Istanbul, in aconsortium with Malaysia Airports Holdings Berhad (20%) and Limak (40%).The project entails a capex of EUR450mn to build a 25-mn passenger capacityterminal in addition to a concession fee of EUR1.93bn payable over theconcession period. With the inauguration of the new terminal on October31, 2009, the capacity of the airport has increased to 25 million passengers.

Revenue driver: The consortium will earn broadly from passenger servicefees (EUR12/international PAX and EUR3/domestic PAX), ground-handlingrevenue, duty-free retail and rentals. It is not entitled to landing and parkingcharges at this airport. SGIA has witnessed very high traffic growth in thepast few years on rising tourist flows to Turkey and some shift in air trafficfrom Istanbul's larger Ataturk airport. We expect passenger traffic to showa CAGR of 21% during FY10-15E, which would scale up revenues.

Financial trends-consortium valued at Rs8.3bn: We believe that revenuewill grow at a CAGR of 35% in FY10-13E. SGIA would report net loss tillFY12 due to higher depreciation and interest in the initial stages postcompletion. We have valued SGIA's core operation at Rs 8.32bn bydiscounting our FCFE estimates explicitly over FY10-29 at discountingrate of 12.0%; this yields Rs3.32bn (Rs1/share) value for GMR's 40% equitystake.

SGIA Revenue breakup (Rsmn)

FY 10 FY 11 FY 12 FY 13 FY 14 FY 15

Total Aero Revenue 2,329 2,971 4,087 5,362 6,604 7,115Total Non Aero related revenue 1,599 2,463 3,315 4,348 5,187 6,267Gross Revenues 3,928 5,434 7,402 9,710 11,791 13,381Concession fee - 5,018 5,018 5,018 5,018 6,273Net Revenues to GHIAL 3,928 416 2,384 4,692 6,773 7,109Aero 59 55 55 55 56 53Non Aero 41 45 45 45 44 47Source: Company, KSBL Research.

Shareholders of DIAL StakeGMR Infrastructure Ltd 40.0%LIMAK 40.0%Malaysia Airports Holding 20.0%

Airport Capacity

Previous Current

PAX Capacity 5 mn 25 mnCargo Capacity - 145,000 tonsPTB Area (sq.m) 25,600 198,000


18

Monetization of real estate: A value creator

GMR Infra's real estate valuation primarily comes from the 250 acresland adjacent to the Delhi International Airport, on the back of the recentmonetization efforts of DIAL consortium. The real estate portion at theDelhi Airport contributes Rs 19.8 per share of GMR Infra. The other landparcels comprising of 1,500 acres at Hyderabad International Airport andKrishna Giri SEZ (2,000 acres acquired) are valued at Rs 3.2 per share ofGMR Infra, making the consolidated value of the real estate portion to beRs 23 per share.

The monetization strategy for the 45 acres of land at Delhi InternationalAirport has been through a bidding process for 19 asset areas which havebeen carved out of this land parcel. The successful bidders are hospitalityplayers like Accor, Inter Globe Hotels, Juniper (partners in Asian Hotels),Aria Hotels (partners in Asian Hotels), Lemon Tree, Bird Group, DBHospitality, Blue Coast Hotels, Pride Hotels, Sweta Estates and BhartiRealty. The DIAL consortium will provide the land on a 57 year lease andwill book the following three income streams from the successful bidders-

1) Refundable upfront deposit - 3 times the average annual lease rentalsfor the 57 years lease

2) Non-Refundable Infrastructure deposit - for providing the basicInfrastructure

3) NPV (Net Present Value) of the lease rentals

The company plans to monetize the remaining 205 acres at the Delhiairport in a similar manner. We have been conservative and assumed thesame rate of net realization along with a 15% discount to value theremaining land at Delhi airport.

Monetization of 45 acres at DIAL

Total (Rs mn) GMR's share (Rs mn) % share

Net Upfront Deposit 14,715 7,946 54%Infrastructure Deposit 6,732 3,635 54%NPV of Lease Rentals 11,137 3,252 29%Total 32,584 14,833Source: Company, KSBL Research.


45 Acre

19

At the Hyderabad International Airport, GHIAL has 1,500 acres of landmarked for real estate development. Of this, the consortium is planningto develop 200 acres by building educational institutions and hospitalityventures to unlock the value for the remaining 1,300 acres. At KrishnagiriSEZ, the company has so far acquired 2,000 acres out of the planned3,300 acres at an average cost of Rs 1 mn / acre. However, given the longgestation period and no concrete plans yet, we have only taken the marketvalue of the land parcels at Hyderabad and Krishnagiri.

Valuation of Hyderabad Airport Land and Krishna Giri SEZ Land

Particulars

Land Area for real estate development at GHIAL (acres) 1,500Value per acre (Rs mn) 11Valuation (Rs mn) 16,500Share of GMR Infra 60%Net Realizable value for GMR Infra (Rs mn) 9,900Value per share of GMR Infra (Rs) 2.7Land acquired at Krishna Giri SEZ 2,000Vale per acre 2Valuation 4,000Les: Acquisition cost 2,000Net Value of Krishna Giri SEZ Land 2,000Value per share of GMR Infra (Rs) 0.5Source: Company, KSBL Research.

Assumptions

1) For the 45 acres monetized until now, the annual lease rentals havebeen taken at Rs17 mn per acre with an increase of 5.5% per annumfor the 57-year lease period.

2) We have assumed the WACC of real estate projects of the company asthe discount rate, which is 12.5%.

3) The net upfront deposit has been calculated as three times the averageannual lease rentals for the 57-year lease minus the present value ofthe refund payment of the upfront deposit in the last three years oflease.

4) Net realization per acre for the remaining 205 acres has been taken atthe same value and then discounted at 15% in order to incorporatethe uncertainty and market risk.

Valuation of remaining 205 acres Rs mn

Net Realization per acre for GMR (from 45 acres) 330

Gross Value of 205 acres at same rate 67,574Less: Discount 15%Net Realizable value for GMR Infra 57,438GMR's share of real estate value 72,272Value per share of GMR Infra (Rs) 20Source: Company, KSBL Research.

20

Roadways: Ample opportunities

Currently, GMR has a balanced road portfolio of six operational BOTprojects, three based on toll collection and three on annuity, aggregatingRs22.7 bn. GMR has recently won two more road projects, one of whichis Hyderabad-Vijayawada (toll-based) and the other is at Chennai OuterRing (annuity-based). These two assets are currently under developmentand are expected to achieve CoD during April-August 2012. It translatesinto a length of nearly 421 km operational and 210 km under construction.GMR deals with not only improvement of roads but also construction ofhighways that stretch across the country. The company's revenue fromthis segment accrues on both annuity and toll basis. The first two roadprojects were both annuity-based that commenced operations in October-December 2004. The next four projects got operational during November2008 - July 2009.

Looking at factors like the government thrust on road development, strongpolitical commitment, and easing liquidity with expected revision inframework for projects, we believe that road development projects are ona steep growth trajectory and would offer immense opportunity for GMR.

Highways: Balanced Portfolio of Annuity & Toll Assets

Operational Projects Under Construction

GTAEPL GPEPLGTTEPL GACEPL GUEPLGJEPL GHVEPL GCORRPL

Location Tuni AnakapalliTambaram -Tindivanam Pochanpalli

Ambala -Chandigarh

Faruknagar -Jadcherla

Tindivanam- Ulundurpet

Hyderabad Vijaywada

Chennai Outer Ring Road

Project Cost (Rs. mn) 3,040 3,900 6,900 4,985 4,713 7,950 22,000 * 11,000 *

Concession Period

17.5 years from May 02

17.5 years from May 02

20 years from Sep 06

20 years from May 06

20 years from Aug 06

20 years from Oct 06

25 years from Jan 10*

20 years from Mar 10*

Road Length 93 kms 103 kms59 kms 58 kms 73 kms35 kms 29 kms181 kms

CoD Oct 2004 Oct 2004 Mar 2009 Nov 2008 Feb 2009 Jul 2009 Apr 2012* Aug 2012*

Scope of Work 2 to 4 lanes 2 to 4 lanes 2 to 4 lanes 2 to 4 lanes 2 to 4 lanes 2 to 4 lanes 4 to 6 lanes6 lanes &2 Service Lanes

Project Name

* Estimated

Concession Type Annuity AnnuityAnnuity Toll TollToll AnnuityToll


21

Road projects to add nearly Rs22 bn to SOTP valuation

Using FCFE valuation methodology, we considered a combined value ofRs22.7 bn for the six road projects. The three annuity roads contributeRs6 bn and the three toll roads constitute Rs16.6 bn, resulting in Rs6.2per share. We have not included the valuation of the projects which areunder construction.

Road portfolio (Rsmn)Project Name Equity Inv Value Stake Value of Rs/share

(Rs mn) GMR's stake

Tambaram-Tindivanam 788 2,041 74% 1,510 0.4Tuni - Anakapalli 788 2,777 61% 1,694 0.5Adloor-Gunla-Pochanpalli 1,380 2,543 100% 2,543 0.7Ambala-Chandigarh 1,400 (15) 100% (15) (0.0)Faruknagar-Thondapalli-Jadcherla 1,178 6,165 100% 6,165 1.7Tindivanam-Ulundurpet 1,990 10,521 100% 10,521 2.9Total 7,524 22,419 6.1Source: Company, KSBL Research.

22

Power segment: Strengthening domestic foothold but theworld is the new market

GMR Infrastructure has three operational power generation plants in India,with a total capacity of 823 MW currently. Moreover, it is planning to addmore than 8,000 MW of generation capacity in India, of which ~4,000MW are in advanced stages of development. On the international front,during October 2008, GMR acquired a 50% stake in InterGen NV, aNetherlands-based power-generating company with operational capacityof 7,658 MW (excluding capacity under construction, 428 MW). Also, GMRacquired a 100% stake in Island Power from InterGen in May 2009; it isSingapore's only privately-owned IPP (independent power producer),with a license to own and operate up to 800 MW of power-generatingcapacity in Singapore.

Meanwhile, the company has extended its hands to acquire coal miningassets internationally, a step to mitigate coal-availability issues andfluctuating coal-price risks. GMR has acquired a 100% stake in PTBarasentoso Lestari, Indonesia, and a 38.5% stake in Homeland EnergyGroup (HEG). HEG, through its subsidiaries, holds a 75% stake in Kendal& Eloff mines in South Africa. We believe owning mining assets abroad isa big positive for the company, considering the visible shortage of coal inIndia. According to our report titled 'Coal will be the key to India's powerambitions', released on September 18, 2009, we expect coal demand inIndia to widely outstrip supply in the coming years. Moreover, we expectcoal imports to rise in the next few years due to the supply shortfall ofdomestic coal and the potential increase in coal blending at the upcomingthermal power stations.

Operational Capacities

Projects Location MW CoD Fuel Fuel Linkage

GMR Energy Limited Mangalore, Karnataka 220 2001 Naphtha Gas from KG BasinGMR Power Corporation Pvt. Ltd Chennai, TN 200 1999 LSHS Open sourceVemagiri Power Generation Ltd Rajahmundry, AP 389 2008 Natural Gas Gas from KG BasinInterGen (net equity capacity) Netherlands 6,254 NA Mix of all NA

Project under implementation

Projects Location MW Exp. COD Fuel Fuel Linkage

GMR Kamalanga Energy Limited Dhenkanal,Orissa 1,400 FY13 Coal Captive MinesVemagiri (Expansion) Rajahmundry, AP 768 FY12 Natural Gas Gas from KG BasinEmco Energy Varora, Maharastra 600 FY13 Coal Coal LinkageGMR energy,Chattisgarh Raipur, Chattisgarh 1,370 FY14 Coal Coal Linkages ExpectedKakinada, Andhra Pradesh Andhra Pradesh 2,000 FY15 Imported Coal Coal from IndonesiaBadrinath Uttaranchal 300 FY16 Hydro NATalong Arunachal Pradesh 160 FY16 Hydro NABajoli Holi Himachal Pradesh 180 FY16 Hydro NAUpper Karnali Nepal 900 FY15 Hydro NAUpper Marsyangdi Nepal 600 FY16 Hydro NASource: Company, KSBL Research.

23

Existing power capacities in India

GMR has three operational power plants with a total generation capacityof 823 MW. These three plants are: (1) low sulphur heavy stock (LSHS)based 200 MW plant in Chennai, Tamil Nadu; (2) naptha-based 220 MWplant in Mangalore, Karnataka; and (3) natural gas-based 388.5 MW plantin Vemagiri, Andhra Pradesh.

GMR Power Corporation Pvt Ltd (Chennai plant)

GMR's oldest plant (200 MW) is in Chennai, operating since 1999 on lowsulphur heavy stock (LSHS). GMR Infra holds a 51% stake in GMR PowerCorporation Pvt. Ltd. The plant is operating currently above a PLF of 80%and selling ~1.4 bn units of energy (kWh) annually. This plant sells itsentire power at a regulated price with Tamil Nadu State Electricity Boardunder a 15-year Power Purchase Agreement (PPA) valid until 2014.

GMR Energy Ltd (Mangalore plant)

GMR's second plant in operations is currently located in Mangalore,Karnataka. The company plans to relocate this plant from Mangalore tothe east coast, near Kakinada, Andhra Pradesh, in Q4FY10, and to convertthe plant from the current naptha-based to gas-based. Also, the existingcapacity of the plant is likely to improve from 220 MW to 235 MW. Therelocation of the plant near Kakinada (closer to the Krishna-Godavaribasin) and the change in fuel base to natural gas is a strategic move bythe company, considering the gas availability in the Krishna-Godavari(KG) basin. The gas supply is expected once the plant is relocated. Theseven-year PPA got over in 2008, and the plant is currently operating onmerchant basis. Due to the relocation exercise, PLF is likely to remainlow in FY10; however, we estimate PLF to touch 50% in FY11 and 75%from FY11. This relocation would not only improve its efficiency but alsohedge fuel supply and price fluctuation risks, given the adequateavailability of natural gas in the new location.

Vemagiri Power Generation Ltd (Andhra Pradesh plant)

The third and latest (operational since 2008) operational power plant islocated in Vemagiri, Andhra Pradesh. This plant is natural gas-based, witha capacity of 388.5 MW. In FY09, the PLF of this plant was quite low dueto gas unavailability. However, it has improved significantly in recenttimes with gas supply coming in from the KG basin. We expect the PLF toimprove significantly and cross ~80% from FY10 onwards. This plant isproposed to have a mix of PPA and merchant, wherein 20% of the capacitycould be sold on a merchant basis. However, the company is still expectingapproval for the merchant mix of 20%; therefore, currently, we haveassumed PPA of 100%. GMR is planning to expand capacity in the samelocation by adding another 768 MW, which is likely to be operationalin FY12.

24

Global existing power capacities

InterGen, Netherlands

GMR Infrastructure, as part of its business strategy to have a presence inthe global energy market, has acquired a 50% stake in InterGen, a leadingglobal power generation company, headquartered in the Netherlands.GMR acquired the 50% stake from AIG Highstar in October 2008. Theremaining 50% of InterGen is held by Ontario Teachers' Pension Plan(OTPP), a large professional pension plan in Canada. GMR acquired the50% stake in InterGen at ~Rs60,000 mn, sourced by long-term debt ofRs41,850 mn and short-term bridge loan (to be refinanced in October2010) of Rs13,500 mn and equity of Rs6,750 mn.

InterGen has 12 power plants located across the UK, the Netherlands,Mexico, Australia and the Philippines, with 8,086 MW of net operationalcapacity (including 428 MW under construction in the Netherlands). Ofthe 8,088 MW, its net equity capacity is 6,254 MW. This acquisition hascatapulted GMR into the league of one of the largest private powergenerators in India. About 70% of InterGen's capacities are sold on along-term basis and the remaining on merchant basis. InterGen has atotal debt of US$4.1 billion on its balance sheet.

Island Power, Singapore

The GMR Group acquired a 100% stake in Island Power from InterGen inMay 2009. Island Power is a Singapore-based, power-generation entitywith a license to own and operate up to 800 MW of electricity-generatingcapacity in Singapore. It is Singapore's only privately-owned IPP.

Island Power has selected a site on Jurong Island (Singapore's oil, gasand petrochemicals hub) for the development of an 800-MW natural gas-fired combined cycle facility. The construction of the power plant isexpected to be completed by 2013.

InterGen-existing and up coming capacities

Name Location COD MW Stake (%) Net Cap. MW

Quezon Power Mauban, Philippines 2000 460 45.9% 211 CoalCallide C Power Project Queensland, Australia 2001 920 25% 230 CoalMillmerran Power Millmerran, Australia 2003 850 29.30% 249 CoalRijnmond Rijnmond, Netherlands 2004 820 100.0% 820 Natural GasSpalding Energy facility Lincolnshire, UK 2004 860 100.0% 860 Natural GasRocksavage Power Station Runcorn, UK 1998 748 100.0% 748 Natural GasCoryton Plant Essex, UK 2002 779 100.0% 779 Natural GasEnerga Campeche Campeche, Mexico 2003 252 100.0% 252 Natural GasBajio power project San Luis de la Paz, Mexico 2002 600 51.0% 306 Natural GasEnerga Chihuahua Chihuahua, Mexico 2003 271 100% 271 Natural GasLa Rosita Power Project Mexicali, Mexico 2003 1100 100% 1100 Natural GasMaasStroom Energie Rotterdam, Netherlands 2010E 428 100% 428 Natural GasTotal 8088 6254Source: Company, KSBL Research.

25

Upcoming projects

Currently, GMR is adding significant capacities, which are under differentstages of construction. In India and Nepal, GMR is planning to add 8,307MW by FY16. Of these upcoming projects, 5,370 MW (~65% of total) arethermal, 2,140 MW (~26%) hydro, and 783 MW (9%) gas-based projects.The gas-based capacity addition includes 15 MW expansion duringrelocation of the existing 220-MW Mangalore plant to Kakinada. Effectively,over the next seven years, GMR is likely to catapult its total generationcapacity by more than 10x, to 9,116 MW compared to the current 809MW. Of the planned capacity addition of 8,307 MW, projects worth 4,150MW are under different stages of construction, while the remaining(mostly hydro projects) are in planning stages currently.

Project under construction

Projects MW Exp. COD Development

Expansion & relocation of 15 FY11 All contracts awarded including BoP, Construction as per scheduleMangalore plantGMR Kamalanga Energy 1,400 FY13 Achieved financial closure for ~Rs. 45 bn, EPC contract awarded to SEPCO,

China and Construction activities commencedVemagiri (Expansion) 768 FY12 Land and water available, EPC contract awarded, BTG contract finalised,

STG contract finalisedEmco Energy 600 FY13 Finance tied-up, Land acquired & water allocation received, Coal Linkages

and MOEF Approval received for 300 MW, BTG supply contract awarded,Construction to commence in Q4 FY2010.

GMR energy,Chattisgarh 1,370 FY14 Land acquired, EPC contract for BTG awarded to Doosan, Korea,Recommended for Coal Linkage by CEA

Project under planningKakinada, Andhra Pradesh 2,000 FY15 Under planning stage, land aquired, financial closure expectedBadrinath (alaknanda) project 300 FY16 CEA concurrence received for DPR, Environmental Clearance

received,Forest Clearance & Private Land Acquisition in progressTalong 160 FY16 Memorandum of Agreement (MoA) signed with the Government of

Arunachal PradeshBajoli Holi 180 FY16 DPR & EIA studies completed for BajoliHoliUpper Karnali 900 FY15 Approval obtained from Govt of NepalUpper Marsyangdi 600 FY16 Approval obtained from Govt of NepalSource: Company, KSBL Research.

Financial Year 2009 2010 2011 2012 2013 2014 2015 2016

1,240

2,900

1,370

2,000

768

15

16

0

Total ( in MW) 809 823 838 1606 3,606 4,976 7,876 9,116

Gradual capacity addition expected

in MW from FY 2010 to 2016

Planned power generation capacity addition ( India & Nepal)

26

Mining (coal) assets to feed ambitious growth plan in power segment

Coal mine in Indonesia

In February 2009, GMR Energy, a subsidiary of GMR Infrastructure,acquired an Indonesia-based greenfield coal mining company, PTBarasentosa Lestari, with proven reserves. PT Barasentosa Lestari holds a30-year mining authorization over two separate coal blocks in SouthSumatra, Indonesia, issued by the Government of Indonesia. The dealsize was ~Rs4,000 mn (US$80 million) for minable coal reserves of 104mn tonnes, indicating a valuation of ~US$0.77 per tonne. We expect miningoperations to begin from FY11 at this mine with capacity of ~2 milliontonnes per annum (MTPA) which will gradually reach 6 MTPA by FY14.We believe that GMR will import the extracted coal from this mine toIndia for its coastal power project. We believe that the company's movehas strengthened its plan to scale up the power business by ensuringcoal supply. Moreover, this acquisition would help to hedge against coal-price fluctuation risks. We believe that owning mining assetsinternationally is a big positive for the company, considering the expectedshortage of coal in India.

Stake in Homeland Energy Group for coal mining assets

In February 2009, the GMR Group acquired a 33.5% stake in Canada-based, Homeland Energy Group Ltd. (HEG), a listed company whichowns coal properties in South Africa through its subsidiary, the HomelandMining and Energy (HMESA). GMR Energy acquired 75.7 mn shares, or~33.5%, of HEG Canada in exchange for 10% voting and equity interestheld by GMR in HMESA. GMR had bought the 10% stake in HMESA inApril 2008 for Rs1,500 mn (US$30 mn). Earlier, GMR was holding a 5% inHEG; therefore, post the acquisition, it now holds a 38.5% stake in HEG.

HEG is a coal producer with operations in the Witbank area of SouthAfrica. HEG owns a controlling interest in the already operational Kendalmines, fully explored Eloff mines and other exploration sites, with totalmineable reserves of around 300 million tonnes. The Eloff mines, whichhas significant coal reserves that are under the pre-feasibility stage, havebeen fully explored. In addition, HEG also holds a 39% stake in HomelandUranium, Inc., a Canadian uranium exploration and development companyfocused on projects in Niger and the US, and around 12% stake in AltonaResources with coal assets in Australia.

Coal Reserves of HEG (Million Tons)Kendal, South Africa 25 operationalEloff, South Africa 275 under development4 other mines in SA 321 under developmentSource: Company, KSBL Research.

HEG effectively controls 621 mn tonnes of coal resources in six coal mines.This includes 25 mn tonnes of coal reserves in Kendal, SA (an operationalopen-cast coal mine producing 1.2 MTPA), 275 mn tonnes of coal reservesin Eloff mines, SA (an open-cast mine under development with expectedproduction of 4 MTPA in 2012), and 321 mn tonnes of coal resources infour other coal mines in SA.

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We believe that GMR will not import its share of coal to India due tooperational constraints. Hence, either it will trade the coal in South Africaor look out for a South African counterpart to work on a barter system toexchange coal. In either case, it is a natural hedge for the company,considering its huge requirement of coal in future to feed the upcomingthermal plants in India.

Likely to unlock value from power segment through IPO

GMR had contemplated to raise funds for its subsidiary, GMR Energy in2008; however, that is yet to materialize. Hence, going forward, we believethe company will take the IPO route to raise funds which could unlockvalue from the energy business for the parent company.

Inorganic growth not ruled out

Given GMR's ambitious growth plans and strong balance sheet, inorganicgrowth cannot be ruled out, in our view. Historically, too, the companyhas been aggressive in acquiring mining assets and power generationcapacities in the international market. Even domestically, GMR Infra hasalready acquired full stake in EMCO Energy, which is setting up a 600MW coal-based power plant. We believe that strong cash flow generationfrom the existing power plants coupled with strong balance sheet willsupport its inorganic growth opportunity.

Valuation: Power business

We have valued GMR's power segment project-wise. While existingdomestic power projects are valued on DCF basis, upcoming projects(under construction only) are valued on EV/MW basis due to lack ofoperational track record. Based on the DCF method, we arrive at a valueof Rs6 per share for its three existing power plants.

Valuation - Domestic Power BusinessCapacities CoD Valuation Beta Discount Equity GMR's Value per

(MW) Method rate % Value(Rsmn) stake % share (Rs)

GMR Energy Limited 220 2001 DCF 1.1 13.9% 7574 100% 2GMR Power Corporation Pvt. Ltd 200 1999 DCF 0.9 14.6% 9534 51% 1Vemagiri Power Generation Ltd 389 2008 DCF 1.0 10.5% 8174 100% 2Value/ share (Rs) 6


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Currently, although 8,257 MW projects are under construction andplanning, for valuation purposes, we have considered only those projectsthat have achieved significant progress in the planning stage and all theprojects under construction. Projects totaling more than 4,100 MW capacityare under construction, including Dhenkanal project (1,400 MW), Vemagiriexpansion (768 MW), Emco Energy (600 MW), and Raipur project (1,370MW). Furthermore, considering the relative development, we haveincluded the 2,000-MW Kakinada project and the 300-MW Badrinath(Alaknanda) project in the planned list.

Currently, in India, ~Rs50 mn per MW is required to set up a thermalpower plant and ~Rs60-70 mn per MW for a gas-based plant. Hence, wehave considered those respective multiples as the base multiple to valueupcoming power plants. Moreover, we have assigned a discount of 10%to our base valuation multiples (EV/MW) for every subsequent year, tocapture the execution risk over time. Factoring the debt to be raised forthese projects, we arrive at an equity value of Rs14 per share for allupcoming projects.

InterGen (Valuation) Rs mnCapacity (MW) 6,254EV/MW 53EV 330096Debt of InterGen 186550Mkt Value of InterGen 143546GMR's stake 50%Mkt Value of InterGen-GMR stake 71773Debt raised by GMR for InterGen 55660Equity Value of GMR's holding in InterGen 16113Per share value (Rs) 4.4USD ( exchange rate in Rs) 45.5Source: Company, KSBL Research.

Valuation - Projects under construction/planningCapacity Exp.CoD Valuation Multiple Discounted Stake EV

(MW) multiple (%) (Rs mn)

GMR Kamalanga Energy Limited 1,400 FY13 EV/MW 50 42 80% 47,134Vemagiri (Expansion) 768 FY12 EV/MW 60 51 100% 38,785Emco Energy 600 FY13 EV/MW 50 39 100% 23,166GMR energy,Chattisgarh 1,370 FY14 EV/MW 50 35 100% 48,527Coastal Andhra Pradesh 2,000 FY15 EV/MW 50 32 100% 64,993Badrinath, Alaknanda 300 FY16 EV/MW 70 35 100% 10,639Talong 160 FY16 EV/MW 0 100% 0Bajoli Holi 180 FY16 EV/MW 0 100% 0Upper Karnali 900 FY15 EV/MW 0 100% 0Upper Marsyangdi 600 FY16 EV/MW 0 80% 0EV (Rs mn) 233,244Net debt (Rs mn) 182,324Equity Value (Rs mn) 50,920Value / Share (Rs) 14Source: Company, KSBL Research.

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We have valued InterGen, based on EV/MW (in line with global peers).The power-generation entities in the US and Europe are trading at 1.16x(see Global Peers) their capacity (MW). Furthermore, adjusting the debtraised by GMR to acquire a 50% stake in InterGen, we arrive at a value ofRs4.4 per share for GMR's stake in InterGen. However, we have notfactored Island Power (800-MW plant in Singapore) currently in our modeldue to insignificant progress in that project.

Valuation: Coal assets

GMR Energy has economic interest in Indonesia-based greenfield coal-mining company, PT Barasentosa Lestari (100%) and 38.5% in Canada-based Homeland Energy Group Ltd. (HEG), a listed company which ownscoal properties in South Africa through its subsidiary, HMESA. We valuethese coal assets of GMR at US$1 per tonne of reserves, in line with thevaluation of similar deals done by Indian companies in the recent past toacquire coal mining assets in Indonesia and the African regions.Accordingly, we arrive at a value of Rs4 per share for GMR's miningassets.

Global Peer Group

Company Country Installed Mcap/MW EV/MW (US$ P/BV (X) EV/EBITDA (X)Capacity (MW) (US$ Mn per MW) Mn per MW) CY09 CY08 CY09

Exelon Corporation US 33,000 0.91 1.23 2.4 5.5 6.3Entergy Corporation US 30,000 0.52 0.87 1.8 7.5 7.5Southern Company US 42,000 0.63 1.12 1.7 8.8 9.3FPL Group US 39,000 0.51 0.96 1.5 8.1 8.3USA - Median 0.58 1.04 1.8 7.8 7.9Electricite de France S.A. France 159,313 0.65 1.16 2.7 8.1 6.7E.ON AG Germany 74,000 1.08 1.87 1.4 10.7 6.7RWE AG Germany 45,196 1.09 1.33 2.7 5.0 5.0Enel SpA Italy 94,300 0.61 1.76 1.3 7.4 6.7Europe - Median 0.86 1.55 2.1 7.8 6.7Total Median 0.70 1.16Source: Bloomberg, Reuters, Company Reports & Karvy ResearchNote:(a) Tenaga Nasional BHD has a Financial Year ended August. Therefore, instead of CY08 & CY09 the data is of August 2009 & August 2010respectively.(b) NTPC has a Financial Year ended March. Therefore, instead of CY08 & CY09 the data is of March 2009 & March 2010 respectively.(c) All price sensitive information is dated as of October 30, 2009.

Valuation- Minning AssetsMineable Mining Equity Equity Equityreserves Value EV Value Value Value perMn Tons ($/ton) (Rs mn) (Rs mn)* Stake (%) (GMR's share) share (Rs)

PT Barasentosa Lestari, Indonesia 104 1 4,711 3,111 100 3,111 1Homeland Energy Group Ltd 621 1 28,131 28,131 38.5 10,831 3Mining asset value/share (Rs ) 4Source: Company, KSBL Research.* USD is taken as Rs 45.3

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Financial Analysis

Revenues to show 21% CAGR

Net sales are likely to show a CAGR of 21% during FY10-13, to Rs58.2 bnand Rs83.8 bn in FY12E and FY13E, respectively. We expect the airportssegment to start contributing significantly to revenue from Q1FY11,considering robust growth in PAX traffic and completion of the DIALPhase-I development by end-FY10. The contribution from power projectsis likely to start rising from FY13 onwards as most of the capacity expansionwould start contributing to revenue.

EBITDA margins to expand sharply

We expect GMR's EBITDA margins to expand from 23.8% in FY09 to 38.8%in FY13E on the back of improving margins from the DIAL and HIALairports.

Profits to be under pressure due to higher depreciation and interest

We expect profitability to be under pressure during FY10E-11E due tohigher depreciation and interest post-commercialization of DIAL andHIAL. Thereafter, in our view, reported profit is likely to show a CAGR of148% in FY12E-13E, largely driven by operating leverage of high-marginassets such as HIAL and DIAL.

Revenue break up (% of total)


44 4337 36

46

1721 21 21

16

39 3742 43

38

-

10

20

30

40

50

FY09 FY10E FY11E FY12E FY13EPower Projects Road and other Projects Airports

EBIDTA Margin trend(%)


22 24

30 3133

39

10

1520

2530

3540

45

FY08 FY09 FY10E FY11E FY12E FY13E

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Investment concern:

Passenger traffic risk at airports: Any slowdown in passenger traffic willhurt financial performance of the airports. We have assumed passengertraffic to grow at a CAGR of 10% over next three years at Delhi airportand 15% at Hyderabad Airport.

Traffic risk at toll based BOT projects: Vehicle traffic is the source ofrevenue for toll-based projects so any slowdown or change in our vehicleestimates would have an adverse impact on the overall profitability ofthe projects.

Project execution risk: The company is adding significant power generationcapacity which will determine future profitability and valuation of powersegment. Any delay or failure in execution of these expected projects couldlead to cost and time overrun, affecting adversly power segment'sfinancials and valuation.

Financial closure risk: Several of the company's projects are in the initialplanning stages and due for financial closure. Delay or failure in financialclosure could cause increase in interest rates and subsequently increasein the cost of the project.

Equity dilution risk: As on Dec. 2009, the company had net debt/equityof 1.62x and we expect by the end-March 10 the company would havenet debt/equity ratio of 2.5x which would further increase to 3.3x by end-March 13 due to series of projects in pipeline. We believe that the companywould have to dilute its equity to improve leverage in the book leadingto dilution in return ratio.

Equity dilution

Year Method of dilution Price** Amount (Rsmn) Equity capital

Aug'2006 IPO 21 7,950 3,310Dec.'2007 QIP 120 39,600 3,641June'09* QIP 57 148 3,667* Issue to IDFC Fund** Adjusted price for split of FV from Rs 10 to Rs 1

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Balance sheet(Rs mn) FY09 FY10E FY11E FY12E FY13EEquity Share Capital 3,641 3,667 3,667 3,667 3,667

Reserves and Surplus 61,070 62,042 63,909 67,520 78,451Net Worth 64,711 65,709 67,577 71,187 82,118LT Loans 106,602 166,190 197,308 226,666 245,537

ST Loans 13,636 27,054 32,120 36,899 39,971Total Loans 120,238 193,244 229,428 263,565 285,508Minority Interest 18,061 18,484 16,808 15,390 16,834

Deferred Tax liabilities 192 192 192 192 192Foreign currency translation 69 69 69 69 69Total Liabilities 203,271 277,698 314,073 350,403 384,720

Gross Block 114,326 184,731 228,255 271,779 308,651Less: Depreciation 17,810 23,674 30,135 39,786 51,311Capital Work in Progress 67,909 74,700 82,170 90,387 99,426

Net Block 164,426 235,757 280,290 322,380 356,766Investments 13,109 14,420 14,708 15,002 15,302Inventories 1,319 1,606 1,797 2,021 2,659

Sundry Debtors 6,609 6,995 8,741 10,302 14,391Cash and Bank Balances 24,665 27,854 19,746 13,941 14,171Loans and Advances 12,612 11,681 14,597 17,204 24,033

Total Current Assets 45,383 48,314 45,059 43,646 55,432Total Current Liabilities 19,647 20,793 25,984 30,625 42,780Net Current Assets 25,736 27,521 19,075 13,021 12,651

Total Assets 203,271 277,698 314,073 350,403 384,720

Profit & loss statement(Rs mn) FY09 FY10E FY11E FY12E FY13ENet revenue 40,192 42,214 49,310 58,284 83,840Growth (%) 75 5 17 18 44Total Expenditure 29,524 27,802 31,108 34,981 46,021EBITDA 10,668 14,412 18,203 23,303 37,819Growth (%) 78% 35% 26% 28% 62%EBITDA (%) 23.8 30.4 30.7 33.4 38.8Depreciation 3,898 5,865 6,461 9,651 11,525EBIT 6,770 8,548 11,742 13,652 26,295EBIT (%) 15.1 18.0 19.8 19.6 27.0Interest and Finance Charges 3,682 7,118 11,399 11,165 12,606Other Income 214 222 277 389 384Profit Before Tax 3,301 1,652 620 2,876 14,072Taxes 530 258 428 683 1,698PAT before Minority Interests 2,771 1,395 191 2,193 12,374Minority Interests (23) 423 (1,676) (1,417) 1,443Adj PAT 2,795 972 1,868 3,611 10,931Growth (%) 33% -65% 92% 93% 203%

RatiosFY09 FY10E FY11E FY12E FY13E

Adj EPS (Rs) 0.8 0.3 0.5 1.0 3.0Cash EPS (Rs.) 1.8 1.9 2.3 3.6 6.1

PER (x) 78.7 226.5 117.8 60.9 20.1P/BV (Rs) 1.7 3.3 3.3 3.1 2.7Debt Equity (x) 1.9 2.9 3.4 3.7 3.5

Net Debt Equity 1.5 2.5 3.1 3.5 3.3Interest Coverage 2.9 2.0 1.6 2.1 3.0RoCE (%) 5.2 5.2 5.8 6.7 9.8

RoNW (%) 4.3 1.5 2.8 5.1 13.3EV / EBIDTA (x) 28.4 25.7 22.8 19.5 12.6EV / Sales (x) 6.8 7.8 7.0 6.5 4.9

Mkt Cap / EBITDA 20.6 15.3 12.1 9.4 5.8Mkt Cap / Sales 4.9 4.6 3.7 3.2 2.3Asset Turnover (x) 2.6 3.9 3.9 3.9 3.2

Effective Interest Rate (%) 3.7 4.5 5.4 4.5 4.6Inventory Day's 21.1 21.1 21.1 21.1 21.1Debtor Day's 53.9 53.9 53.9 53.9 53.9

Other CA Day's 104.3 90.0 90.0 90.0 90.0Current Liabilities Day's 160.2 160.2 160.2 160.2 160.2

Cash flow(Rs mn) FY09 FY10E FY11E FY12E FY13EEBIT 6,770 8,548 11,742 13,652 26,295(Inc.)/Dec in working capital (5,474) 1,404 338 249 600Cash flow from operations 1,295 9,952 12,079 13,901 26,895Other income (450) 222 277 389 384Depreciation 3,898 5,865 6,461 9,651 11,525Interest paid (-) (3,417) (7,118) (11,399) (11,165) (12,606)Tax paid (-) (998) (258) (428) (683) (1,698)Dividends paid (-) - - - - -Net cash from operations 328 8,664 6,990 12,093 24,499Capital expenditure (-) (30,388) (77,196) (50,994) (51,741) (45,911)Net cash after capex (30,059) (68,533) (44,004) (39,648) (21,412)Inc./(dec.) in borrowings 38,663 73,007 36,184 34,137 21,942Inc./(Dec.) in investments 139 (1,311) (288) (294) (300)Issue of common stock inconsolidated entities 6,981 - - - -Equity issue/(buyback) - 26 - - -Cash from financial activities 45,783 71,722 35,896 33,843 21,642Opening cash 8,942 24,665 27,855 19,746 13,941Closing cash 24,665 27,855 19,746 13,941 14,171Change in cash 15,724 3,189 (8,108) (5,805) 230

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Research Desk (Tel: 91-22-22895000)Hemindra Hazari Head of Research [email protected]

Institutional Sales (Tel: 91-22-22895000)N Subramaniam Head of Institutional Sales [email protected]

Stock Ratings Absolute Returns Stock Ratings Absolute ReturnsBuy : > 25% Market Performer : 0 - 15%Out Performer : 16 - 25% Under Performer : < 0%Sell :

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GMR - IC - 260310