India’s domestic commercial fleet operators revenue to grow by 8-10% this fiscal year, driven by strong domestic demand and import-related transport requirements, according to a new report by Crisil Ratings.
This marks a continuation of robust growth, extending a 12-13% compound annual growth rate sustained over the last four years. The report notes that domestic demand constitutes 65-70% of revenue for fleet operators, helping to offset modest growth in export-related traffic.
Crisil forecasts that this higher demand will push fleet utilisation up to 86-87% this fiscal, an increase from 85% last year, even as new fleets are added.
Consequently, operating margins are expected to remain stable at 8.0-8.5%. This stability comes despite operators facing rising operational costs, including a marginal increase in fuel costs, which account for 43-45% of total expenses, partly due to the new regulatory mandate for air-conditioned driver cabins in new fleets from October 2025.
“The government’s infrastructure push will enable faster turnarounds and improved efficiencies for fleet operators, cranking up their volume throughput,” said Himank Sharma, Director at Crisil Ratings.
He added that growing demand from consumption and freight-intensive sectors, combined with better roads, should offset the impact of higher US tariffs on export volume.
Furthermore, the financial burden of fleet expansion is being eased by a recent reduction in the Goods and Services Tax (GST) on commercial vehicles from 28% to 18%, lowering the cost of acquisition.
Shalaka Singh, Associate Director at Crisil Ratings said, “Fleet operators are expected to undertake a sizable capex of ₹1200-1300 crores (₹1.21 – ₹13 million ) this fiscal, funded by 80-90% debt. This will be 15% higher than the average capex over the last three fiscals.”
Despite this increase in debt-funded expansion, Crisil expects credit profiles to remain stable, supported by healthy cash accruals. Debt protection metrics are even likely to improve, with gearing expected to be below 0.5 times and interest coverage rising above 6.5 times this fiscal.
