Toll operators in India to see a revenue jump of 16-18% in FY23: CRISIL

In FY24, the revenue growth will continue to be strong, but it will be a lower 9-11 per cent

Raghav Aggarwal New Delhi
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Backed by high inflation and healthy traffic growth, the revenue of toll road operators in India is expected to jump a significant 16-18 per cent in 2022-23 (FY23), shows data revealed by rating agency CRISIL on Tuesday.
In FY24, the revenue growth will continue to be strong, but it will be a lower 9-11 per cent.

Since 2018, the sector has faced several headwinds, including the impact of the goods and services tax (GST), pandemic restrictions and then supply chain disruptions. These limited the traffic growth between FY18 and FY22 to 2-3 per cent.
But in FY23, the traffic growth is expected to be stronger, led by high demand for commercial vehicles and strong personal mobility demand.

CRISIL said that with Wholesale Price Index (WPI) inflation printing lower at 4.95 per cent for December, next year will see a toll rate hike of 5 per cent.
"The revenue of toll road operators will soar in FY23, driven by a high toll rate hike of ~10.5 per cent, which is linked to inflation based on the WPI. The traffic growth at 5-7 per cent will also remain healthy, albeit on a low base of fiscal 2022. This resilience in traffic growth will be on the back of economic activity led commercial traffic, and strong personal mobility, supported by leisure and business travel," says Anand Kulkarni, director at CRISIL Ratings.

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In FY24, growth is expected to taper to 4-6 per cent, but it will still be higher than the average of the last four years.
Additionally, traffic growth is also linked to real gross domestic product (GDP) growth. According to the Centre's advance estimates, the Indian GDP is expected to expand by 7 per cent in FY23 and 6 per cent in FY24.

"The credit profiles of toll road players have remained strong in FY23 and will sustain in FY24, helped by healthy toll revenue growth," says Saina Kathawala, associate director at CRISIL Ratings.

First Published: Mar 28 2023 | 1:04 PM IST

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