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Road transport fleet operators revenue to grow at 9-11% in FY25: CRISIL

It further said operating margin is seen improving 75-100 basis points on better fleet utilisation and steady fuel costs

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Photo: Bloomberg

Press Trust of India New Delhi

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Revenue growth of road transport fleet operators is expected to double to 9-11 per cent this fiscal, riding on better domestic demand amid tepid exports, CRISIL Ratings said on Thursday.

It further said operating margin is seen improving 75-100 basis points on better fleet utilisation and steady fuel costs.

According to the rating agency, the credit profile of operators should remain strong as well, as they may look to moderate capital expenditure (capex) towards fleet expansion, following strong additions in the past three fiscal years, as new guidelines for air-conditioned driver cabins kick in the next fiscal year.
 

Fleet operators expanded their fleet size by 60 per cent in the three fiscal years through 2024, as demand recovered sharply post the Covid-19 pandemic and returns from fleet additions were immediate.

 

"With focus now on consolidation of operations, fleet additions would moderate to 15 per cent of the existing fleet size this fiscal, on a significantly expanded base," it said.

CRISIL Ratings said the Ministry of Road Transport and Highways mandate of air conditioned cabins for drivers from October 2025, would lead to nominal capex, if operators decide to retrofit older vehicles.

(Only the headline and picture of this report may have been reworked by the Business Standard staff; the rest of the content is auto-generated from a syndicated feed.)

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First Published: May 23 2024 | 4:48 PM IST

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