Delhi International Airport Limited: An In-depth Financial Analysis – Net Loss Grows by 534.24 Crores

Business Description

Delhi International Airport Limited (DIAL) is engaged in the operation and management of the Indira Gandhi International Airport in New Delhi, India. The company offers aeronautical services such as user development fees, passenger service fees, and landing/parking charges. Additionally, it provides non-aeronautical services including retail, advertising, food & beverages, cargo handling, and car parking. DIAL operates exclusively in India.

Industry Position and Market Share

DIAL is a significant player in the Indian aviation industry, managing one of the busiest airports in the country. It faces competition from other major airports in India like Chhatrapati Shivaji Maharaj International Airport in Mumbai and Kempegowda International Airport in Bengaluru. Although specific market share details are not provided, its strategic location in the capital city gives it a competitive edge.

Revenue Streams

DIAL generates revenue from two primary streams:

• Aeronautical Services: User development fees, passenger service fees, landing/parking charges, and baggage handling.
• Non-Aeronautical Services: Retail, advertising, food & beverages, cargo handling, ground handling, car parking, and land/space rentals.

Financial Statement Analysis

Income Statement

For the six months ended September 30, 2024, DIAL reported a total revenue of Rs. 2,667.22 crores, up from Rs. 2,452.36 crores for the same period in 2023. Despite this increase in revenue, the company reported a net loss of Rs. 674.05 crores, significantly higher than the Rs. 106.34 crores loss reported for the same period in 2023. Key contributors to this loss include high finance costs amounting to Rs. 894.69 crores and depreciation/amortisation expenses of Rs. 569.90 crores [[4]].

Balance Sheet

As of September 30, 2024, DIAL’s total assets stood at Rs. 24,269.28 crores, with total liabilities amounting to Rs. 22,625.54 crores. The company’s current liabilities exceed its current assets by Rs. 1,183.19 crores, indicating potential liquidity issues. Significant non-current liabilities include borrowings of Rs. 14,808.40 crores and other financial liabilities of Rs. 2,858.77 crores [[3]].

Cash Flow Statement

For the six months ended September 30, 2024, DIAL reported net cash from operating activities of Rs. 557.67 crores, a significant decrease from Rs. 1,597.48 crores for the same period in 2023. The net cash used in investing activities was Rs. 183.59 crores, and net cash used in financing activities was Rs. 964.04 crores [[7]].

Key Findings

• Revenue Growth: The company reported a revenue increase of Rs. 214.86 crores compared to the previous year.
• Net Loss Increase: The net loss grew significantly by Rs. 534.24 crores, from Rs. 106.34 crores to Rs. 674.05 crores.
• Liquidity Concerns: Current liabilities exceed current assets by Rs. 1,183.19 crores.
• High Finance Costs: Finance costs are substantial at Rs. 894.69 crores, impacting profitability.

Special Activities to Improve Profitability

The company has entered into “Call Spread Options” with various banks to hedge against foreign exchange risks for its USD-denominated borrowings [[36]].

Report Date

The report is dated October 24, 2024, for the six months period ended September 30, 2024 [[1]].

Investor Recommendations

For Existing Investors

Due to the significant increase in net loss and liquidity concerns, existing investors should consider holding their position and closely monitoring the company’s future performance and strategic initiatives to improve profitability.

For Potential Investors

Potential investors should exercise caution before investing in DIAL. The company’s current financial health indicates high risks due to its increased net loss and liquidity issues. It may be prudent to wait and observe how the company addresses these challenges in the upcoming quarters.

Disclaimer

This analysis is based on the financial statements provided in the report dated October 24, 2024. The recommendations are for informational purposes only and should not be construed as financial advice. Investors should perform their own due diligence or consult with a financial advisor before making any investment decisions.