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Rating agency Icra in its latest report has said that Inflation-linked toll rates of various road projects will see a moderate hike of 2-5 per cent in the next fiscal year due to falling wholesale price index.  It has revised down the outlook on the toll road sector to stable from positive for FY24, citing the easing wholesale price inflation which fell to 4.95 per cent in December 2022.

It mentioned the wholesale price index (WPI) based inflation is expected to fall further and is likely to settle at sub-2 per cent in March 2023. Accordingly, the inflation-linked hike in toll rate will be relatively modest at 2-5 per cent in FY24 compared to the 8.7-14.6 per cent hike in FY23.

On the change in the outlook to stable from positive, it said the revision primarily reflects the expected moderation in toll collection growth to 6-9 per cent in FY24, compared to a stellar 17-20 per cent growth in FY23, which was driven by a healthy toll rate increase on the back of high inflation as well as improved economic activity.