NewKerala.com

India's Toll Collection Growth Set to Accelerate to 5-9% by FY27: ICRA

A new ICRA report projects India's toll collection growth will improve to 5-9% in FY26, driving stability in the sector through FY27. This growth is supported by inflation-linked toll rate hikes of 1.6-3.2% and healthy debt coverage metrics for projects. The National Highways Authority of India has raised over ₹1 lakh crore through asset monetization since FY19, with proceeds expected to reach ₹1.3 lakh crore this fiscal. While road execution is forecast to moderate slightly, the overall outlook remains stable due to steady traffic growth and controlled inflationary pressures.

Key Points: India Toll Collection Growth to Hit 5-9% by FY27

  • Stable sector outlook
  • Inflation-linked toll hikes
  • Strong project monetization
  • Moderate road execution forecast
2 min read

Toll collection growth in India likely to improve to 5-9 pc: Report

ICRA report forecasts stable growth for India's toll road sector, with toll collections rising 5-9% and inflation-linked hikes driving stability through FY27.

"On the back of benign WPI inflation, the inflation-linked toll rate hike is projected at around 3.2 per cent for newer projects... - M Rajashekar Reddy, ICRA"

New Delhi, Jan 3

Traffic and toll collection growth is expected to improve to 5-9 per cent in FY26, which will drive stability in the toll road sector through FY27, a new report has said.

The report from ICRA said that the outlook on the toll road sector remains stable, paving the way for sustained growth.

"On the back of benign WPI inflation, the inflation-linked toll rate hike is projected at around 3.2 per cent for newer projects and 1.6 per cent to 2 per cent for older projects in FY2027," said M Rajashekar Reddy, Assistant Vice President & Sector Head, ICRA.

As a result, toll collection growth is expected to improve 5-8 per cent in FY27. On the back of healthy toll collections and benign O&M costs, the debt coverage metrics for BOT toll road projects are expected to remain adequate, the report noted.

The report also highlights that recent tightening in bidding norms for Hybrid Annuity Model (HAM) and Engineering, Procurement, and Construction (EPC) projects is a positive step. However, competitive intensity is unlikely to ease materially as several players continue to qualify under the stringent norms.

The National Highways Authority of India (NHAI) raised Rs 12,357 crore through Toll‑Operate‑Transfer bundles in the first nine months of FY26, taking cumulative monetisation since FY19 to Rs 1,04,990 crore. With additional bundles in the pipeline, overall proceeds are expected to reach approximately Rs 1.3 lakh crore by the end of this fiscal.

Road execution by the Ministry of Road Transport and Highways (MoRTH) stood at 3,468 km between April-October 2025, compared to 3,920 km in the corresponding period last year. For the full fiscal year FY2026, the agency forecasted road execution to moderate to 9,000-9,500 km, marginally lower than the 10,660 km achieved in FY25.

The ratings agency estimated road awards to reach 8,500-9,000 km in FY2026, slightly higher than the estimated 7,500-8,000 km in FY2025. A meaningful pick-up in order awards from the Ministry is considered vital to ease competitive intensity and support the sector, it noted.

Despite the near-term challenges in construction, the outlook for the operational toll road sector remains stable, supported by expectations of steady traffic growth and controlled inflationary pressures, it added.

Further, it maintained a 'Stable outlook' on the broader construction sector, projecting a revenue growth of 8-10 per cent for FY2027, marginally better than the 6-8 per cent growth anticipated for FY2026.

- IANS

Share this article:

Reader Comments

S
Shreya B
While the numbers look positive, I wish the report also addressed the actual user experience. Toll plazas still have long queues sometimes. Efficiency in collection should match the financial growth.
A
Arjun K
The 5-9% growth is promising, but as a regular user of the Mumbai-Pune expressway, I feel the toll rates are already quite high. A 3.2% hike on newer projects will pinch the common man's pocket. Infrastructure is good, but affordability matters too.
P
Priya S
Stable outlook is a relief for the sector. The tightening of bidding norms for HAM projects is a very positive step – should improve quality and reduce fly-by-night operators. More transparency is always welcome.
M
Michael C
Interesting data. The marginal dip in road execution this year (9,000-9,500 km vs 10,660 km last year) is worth noting. Hope the focus on quality doesn't slow down the pace of connecting rural areas, which is crucial for inclusive growth.
V
Vikram M
The report is comprehensive. The fact that debt coverage metrics remain adequate is key for long-term investor confidence. This stability should attract more investment into our infrastructure, which is the backbone of the economy. 💪

We welcome thoughtful discussions from our readers. Please keep comments respectful and on-topic.

Leave a Comment

Minimum 50 characters 0/50