Fleet operators’ revenues are projected to grow 8-10 per cent in FY26, supported by strong domestic and import-related demand, according to Crisil Ratings. The sector has recorded a compound annual growth rate (CAGR) of 12-13 per cent over four years through FY25. Growth momentum is expected to sustain this fiscal despite modest export performance.
Crisil’s analysis of 40 fleet operators, which account for about a fourth of the industry’s revenues, indicates that higher domestic consumption and freight-intensive activities will continue to drive volumes. Export-linked demand, however, remained subdued due to the recently announced US tariffs. Even so, fleet utilisation is projected to increase to 86-87 per cent in FY26 from 85 per cent last year, keeping operating margins steady at 8-8.5 per cent.
The mandatory addition of air-conditioning in new truck cabins from October 2025 is expected to push up acquisition and operational costs, including fuel, which accounts for 43-45 per cent of total expenses. Most of these higher costs will likely be passed on to customers, albeit with a time lag, according to Crisil. A key offsetting factor will be the recent cut in Goods and Services Tax (GST) on commercial vehicles to 18 per cent from 28 per cent, which will lower the total cost of ownership and support fleet expansion.
“The government’s infrastructure push will enable faster turnarounds and improved efficiencies for fleet operators, cranking up their volume throughput. Hence, growing demand from consumption and freight-intensive sectors, and better roads should offset the impact of higher US tariffs on export volume. Thus, fleet operators will see revenues grow, riding on buoyant domestic consumption,” said by the director, Crisil Ratings.
Fleet operators are likely to undertake a capex of ₹1,200-1,300 crore in FY26, about 15 per cent higher than the average of the past three years, largely funded by long-term debt. Gearing and interest coverage are expected to remain comfortable below 0.5 time and above 6.5 times, respectively.
