India's commercial fleet operators are confident of a robust 8% - 10% revenue growth in the current fiscal year (FY26), according to a new report by Crisil Ratings. This optimistic forecast is driven by strong domestic demand and a significant, supportive policy change in the Goods and Services Tax (GST) structure.
The growth has been built on a strong compound annual growth rate (CAGR) of 12% - 13% over the past four fiscal years, primarily fueled by strong consumption and freight-intensive sectors within the country.
A major catalyst for the sector has been the government's recent reduction of GST on commercial vehicles to 18% from the previous 28%. This 10% age-point tax cut is set to directly lower the acquisition cost for operators, easing the capital burden of fleet expansion and renewal.
As per The Business Standard report, Himank Sharma, director, Crisil Ratings, said that, “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.”
Despite this strong growth rate, operating margins are expected to remain stable, holding steady in the 8.0% - 8.5% range. This stability comes even as operators face rising operational costs, notably from the regulatory mandate requiring air-conditioned cabins for all new trucks from October 2025, which will marginally increase fuel expenses.
The positive demand environment is also projected to boost fleet utilisation to 86% - 87% this fiscal year, up from 85% last fiscal year. Supported by the lower GST outlay, operators are expected to undertake sizeable capital expenditure of ₹1,200 - ₹1,300 crore in FY26 to expand their fleets, funded largely by long-term debt.
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