Traffic and toll collection growth are projected to see a rise of 5-9% in the fiscal year 2026, leading to stability in the toll road sector through FY27, as per a report by ICRA. The report indicates a stable outlook for the toll road sector, setting the stage for sustained growth.
M Rajashekar Reddy, Assistant Vice President & Sector Head at ICRA, mentioned that due to low WPI inflation, the inflation-linked toll rate hike is estimated at approximately 3.2% for new projects and 1.6-2% for older projects in FY2027. This is expected to result in an improvement of 5-8% in toll collection growth for FY27.
The report also points out that with robust toll collections and manageable O&M costs, the debt coverage metrics for BOT toll road projects are likely to remain satisfactory. Moreover, recent stricter bidding norms for Hybrid Annuity Model (HAM) and Engineering, Procurement, and Construction (EPC) projects are viewed positively, although competition is not expected to ease significantly due to many players meeting the stringent criteria.
The National Highways Authority of India (NHAI) has raised Rs 12,357 crore through Toll-Operate-Transfer bundles in the first nine months of FY26, bringing the total monetization since FY19 to Rs 1,04,990 crore. With more bundles in the pipeline, the overall proceeds are anticipated to reach around Rs 1.3 lakh crore by the fiscal year-end.
