Revenue growth of fleet operators to double to 9-11 % this fiscal: CRISIL

According to a latest report by CRISIL Ratings, Revenue growth of road transport fleet operators is expected to double to 9-11 per cent this fiscal. It is driven by better domestic demand, and despite tepid exports. The operating margin is seen improving 75-100 basis points on better fleet utilization and steady fuel costs, the report adds. 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, even as new guidelines for air-conditioned driver cabins kick in next fiscal. It said that steady working capital is also providing support. CRISIL analysed 45 large fleet operators in its portfolio, which account for a quarter of the industry’s revenues, to reach the findings. Nearly a third of freight demand emanates from export-oriented sectors, which, after decelerating last fiscal, is showing signs of improvement, in line with growth trends in India’s key export destinations – the eurozone and the US, stated CRISIL.