Morgan Stanley Underweight on GMR Infrastructure

Morgan Stanley is underweight on GMR Infrastructure. Research firm continue to believe that the company has one of the best long-term stories in the infrastructure development sector in India but is underweight on GMR in the Short to Medium Term.

GMR handed over contracts on both the construction and operations side (advertisement at Delhi and duty free at Hyderabad) in the quarter. The market is focused on the potential value creation from the monetization of a 45 acre (5.9 million sq ft) hospitality district at Delhi Airport. GMR expects to finalize the developer for this land parcel by September 2007.

Valuations remain high; Morgan Stanley retains Underweight call on the company due to lack of earnings visibility and doubts over consistency of maintaining the same.