WionDrive News Desk 
In its recent report on road transport fleet operators, India’s rating agency Crisil Ratings forecasted the actual increase in ‘revenue growth’ increasing to 9-11 per cent in the current financial year 2024-25. This, according to Crisil, is backed by strong domestic demand, although exports are not very encouraging. The operating margins are expected to improve in the future due to optimised use of the fleets and stable fuel prices.
Further, the credit profile of operators is expected to remain sound as operators shift focus from aggressive capital expenditure undertaken in the last three years. This change comes at a time when new rules requiring comforted temperature-controlled driver compartment are expected to be implemented next year. Recent signals point to the fact that auto makers will in near future be required to install ACs within cabs of trucks and the practice is expected to commence around 2025.
The Crisil report said, “With the present focus on rationalisation, fleet additions are expected to slow down to 15 per cent of the existing fleet size in the current fiscal, as against a rising trend in the preceding years. Further, the Ministry of Road Transport and Highways’ order for air conditioning cabins from October 2025 is expected to entail negligible capital expenditure if operators decide to retrofit old vehicles”.
The report also noted that roughly a third of freight demand comes from sectors tied to exports, which is expected to improve following a decline the previous year, in line with India’s major export destinations in the eurozone and the US. According to Crisil, the domestic sectors which are heavy users of freight services and which are expected to bring volume growth this year include mining, industrial manufacturing, infrastructure and engineering goods.
Despite certain costs holding steady, operators are expected to witness an improvement in operating margins, projected to reach 9.0-9.5 per cent this year, according to the report.
(with inputs from ANI)
