Why is GMR Airports stock up 22% while InterGlobe Aviation and SpiceJet shares fall?

The Indian aviation sector is showing a clear split.

GMR Airports stock performance has been a major outlier. India’s largest airport operator saw its stock climb 22% in the second half of 2025. This growth contrasts sharply with its listed peers. Airlines and services companies struggled with volatility. Sectoral peers like InterGlobe Aviation, SpiceJet, Dreamfolks Services, and Global Vectra Helicorp all saw declines. These losses ranged from 16% to a steep 54% over the same period. Investors are clearly favoring airport infrastructure investment over airline operations.

The Infrastructure Advantage

Airports offer a more stable investment profile. Their revenue streams are often described as annuity-like income streams. This means income is consistent and predictable over long periods. GMR Airports operates under long-term concession agreements. This provides a strong, regulated base for its financial outlook. The company is seen as a pure-play infrastructure bet.

Regulatory and Financial Tailwinds

A key driver for the GMR Airports stock performance was a favorable regulatory change. The Delhi International Airport (DIAL) received a new tariff order. This order mandates a substantial 147% Delhi Airport tariff hike. This hike is effective for the five-year period from FY25 to FY29. It allows the company to recover past investments.

Operational performance also showed strong momentum. GMR reported a 47% rise in revenue for Q2 FY26. EBITDA climbed 56% in the same quarter. Analysts project GMR will achieve a positive net profit by FY26.

Diversifying Revenue Streams

GMR Airports is actively diversifying its income. The company is increasing its focus on non-aeronautical revenue. This includes retail, duty-free, cargo, and MRO services. Non-aero business is expected to contribute up to 75-80% of total revenues. This strategic pivot transforms the company into a consumption-oriented business. Passenger traffic is also growing robustly. GMR is projected to see a 9% passenger traffic Compound Annual Growth Rate (CAGR) from FY25-FY28. This rate is expected to outpace India's average.

Volatility for Airlines and Aviation Services

In contrast, the Indian aviation sector’s operational side faces constant challenges. Airlines like InterGlobe Aviation and SpiceJet are exposed to high airline stock volatility. Their profitability is highly sensitive to external factors.

• Fuel Price Volatility: Fluctuating jet fuel prices are a major operational cost. This directly erodes profit margins.
• Currency Risk: Airlines are exposed to currency rate changes. Aircraft leases and maintenance costs are often paid in US dollars.
• Competition: Intense market competition leads to price wars. This further shrinks already thin profit margins.

While India’s air traffic growth is strong, as noted by IATA, the financial risks for airlines remain high. Investors are therefore shifting their focus. They are moving from high-risk, high-cost operations to stable, regulated infrastructure assets. This trend highlights the value of long-term airport infrastructure investment in a booming market. For more commercial aviation news and analysis, visit flying.flights.