Toll road operators are likely to log in lower top line growth at 9-11 per cent in 2023-24 compared to a robust 16-18 per cent rise in revenue this fiscal, says a report.

In a report on Tuesday, rating agency Crisil said the jump of 16-18 per cent in revenue this fiscal will be on the back of significant hike in toll rates due to elevated inflation, and healthy traffic growth on national highways.

However, the revenue will moderate to 9-11 per cent in FY24 due to falling inflation and a likely moderation in traffic growth, it said.


The report, based on an analysis of 49 toll road assets across 14 states, also said that robust toll collections along with adequate balance sheet liquidity will support credit profiles of toll road operators.

According to Anand Kulkarni, a director at the agency, revenue of toll road operators will soar in fiscal 2023, driven by high toll rate hike of 10.5 per cent, which is linked to wholesale price inflation.

Traffic growth at 5-7 per cent will also remain healthy, albeit on a low base of fiscal 2022.

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In fiscal 2024, traffic growth is expected to taper to 4-6 per cent but will remain higher than the four-year compound annual growth rate of 2-3 per cent seen through fiscal 2022.

Traffic growth is closely linked to real gross domestic product growth, which is expected to decline to 6 per cent in fiscal 2024 from 7 per cent in fiscal 2023, the report noted.

Lower revenue projection is also due to falling WPI inflation which was lower at 4.95 per cent in December 2022. This means that toll rates will go up by 5 per cent next fiscal and consequently, toll revenue is expected to grow 9-11 percent in fiscal 2024, it added. PTI BEN RAM

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