Due to high inflation rate and huge increase in traffic, the revenue of toll road operators is expected to increase drastically. According to data from rating agency Crisil released on Tuesday, the revenue of these operators is estimated to increase by 16-18 per cent in the financial year 2022-23.
Revenue growth may be strong in FY-24 as well but will be weak compared to its previous year. According to the report, revenue growth will be lower by 9-11 per cent in this financial year.
Since the year 2018, the sector has gone through a rough patch. During this time there was an impact of the Goods and Services Tax (GST) and along with it many restrictions due to the pandemic and then disruption in the supply chain. Due to all these reasons only 2-3 per cent increase in traffic was seen between FY-18 to FY-22.
But there has been a significant increase in the demand for commercial vehicles in FY-23 and an increase in personal vehicles is also being seen. In such a situation, it is being estimated that there will be a huge increase in traffic in FY-23.
Crisil said that the inflation rate of Wholesale Price Index (WPI) is seen slightly lower with 4.95 percent in December. Next year the toll rate may reach around 5 per cent.
Anand Kulkarni, Director, Crisil Ratings, said the revenue of toll road operators would grow by 10.5 per cent in FY23, driven by higher inflation on a WPI basis. Traffic is also likely to see an increase of around 5-7 per cent, due to which the sector will remain strong, even if the financials of 2022 remain weak. This increase in traffic will also boost economic activity as more and more people will travel for leisure or business purposes.
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