Domestic commercial fleet operators in India are set to see a solid boost in revenue this fiscal year. A Crisil Ratings report released Monday projects 8‑10 % growth, extending the previous 12‑13 % compound annual growth rate through 2025.
The lift comes from steady domestic demand and a steady stream of import‑related business, even though export growth stays modest. “India’s infrastructure push will tighten delivery cycles and lift volumes for fleet operators,” said Himank Sharma, Crisil’s director of ratings. “Higher domestic consumption will keep revenues climbing.”
Fleet utilisation is expected to climb to 86‑87 % this year, up from 85 % last fiscal, as demand from food, freight and other consumption‑heavy sectors stays strong. This higher utilisation will help keep operating margins steady at around 8‑8.5 %.
Operating costs are set to rise slightly after the new rule requires air‑conditioning in new vehicles from October 2025. However, the recent drop in the Goods and Services Tax (GST) on commercial vehicles—from 28 % to 18 %—cuts purchase costs and keeps profit margins in check.
Credit experts say fleet operators can maintain solid financial health even as they add more vehicles. The report notes that 65‑70 % of operators’ revenue comes from domestic traffic, with the rest from import‑export shipments.
With higher revenues and stable margins, cash flow should improve, supporting the extra working capital needed for growth. Big-ticket purchases are likely to be financed through long‑term debt, thanks to lower interest rates and a cheaper cost of ownership after the GST cut.
“Fleet operators will invest roughly ₹1,200‑1,300 crore this fiscal, mostly funded by debt (80‑90 % of the capex), which is 15 % more than the average over the past three years,” added Shalaka Singh, associate director at Crisil.
The report underscores that India’s expanding road network and government infrastructure programmes are key drivers behind this positive outlook for the domestic commercial fleet sector.
Source: ianslive
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