Jan 21, 2025 | Infrastructure

Comfortable Passenger Growth, Focus on Non-Aero Revenue Support Positive Rating Outlook for Airports for FY26

India Ratings and Research (Ind-Ra) has maintained a Positive rating Outlook for airports for FY26, due to the aeronautical revenues growing in line with robust traffic growth, improving non-aero revenue yields, visibility of funding capex and expected completion of capex in three greenfield airports in Ind-Ra portfolio in FY26 and FY27. In 8MFY25, all India air traffic grew 8.5% yoy to 266.1 million passengers (pax). Air traffic at public-private partnership airports grew 8.6% yoy in the same period. Plans for privatisation, upcoming greenfield airports and developments in cargo infrastructure provide opportunities for the private sector. International airports under the public-private partnership mode in Navi Mumbai and Jewar (Noida) are expected to commence operations in FY26, whereas the Bhogapuram (Visakhapatnam) international airport is expected to commence operations in FY27, as per Ind-Ra.
Jan 21, 2025 | Infrastructure

Road Sector Fundamentals Remain Comfortable, Opportunities to Cater to Investors with Different Type of Risk Appetite in FY26

India Ratings and Research (Ind-Ra) has maintained a neutral outlook for the road sector for FY26, due to the softened Wholesale Price Index level and intermodal shift in traffic and in view of the likely modest toll collections, shifting of preference from the highly preferred hybrid annuity mode (HAM) to the build-operate-transfer (BOT) model wherein bidding trends and award quantum need to be seen, and land availability issues. Ind-Ra opines the roads sector continues to be a focus area for the government with 22% of the capex allocation towards the Ministry of Road Transport and Highways (MoRTH). Growth in capex during FY26 is likely to be slower than that seen during FY18-FY24. Project awards are likely to improve in FY26 across BOT, HAM, toll-operate-transfer (TOT). Resolving land-related issues in HAM projects, completing the planned BOT awards and a road map for road connectivity are required to increase the construction momentum compared to the lull witnessed during FY25, majorly due to the elections and unseasonal/excess rains. Furthermore, the government’s aim to increase the focus on the quality of construction and maintenance, including the introduction of performance assessment rating system, evaluated bi-annually and monitored digitally, augurs well for the sector.
Jan 21, 2025 | Infrastructure

Electric Buses Adoption – On a Steady Charge; Operational Concerns Remain for FY26

India Ratings and Research (Ind-Ra) has maintained a Stable rating Outlook for electric bus projects for FY26. The rating outlook reflects the satisfactory operational track record, adequate sponsor support and improving deliveries of e-buses observed in the rated portfolio. While the debtor days are comfortable for Ind-Ra rated entities, there were few instances of elongation in the receivables period. Public transport authorities (PTA) have bid out several e-buses, leading to an order book of over 20,000 buses. Given the large e-bus order book with original equipment manufacturers (OEMs), an improvement in the delivery capacity of suppliers and scaling up of deliveries in FY26 and FY27 is a key monitorable, given the timelines for supply under the concession agreements. Inconsistencies in measuring operational parameters and deductions relating to the same are rating constraints and could necessitate sponsor support.

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