Revenue of domestic MRO industry to surpass Rs 4,500 crore in fiscal 2026: Crisil Ratings
Crisil Ratings in its latest report has said that revenue of the domestic aircraft maintenance, repair and overhaul (MRO) industry will surpass Rs 4,500 crore in fiscal 2026, clocking an impressive 50 per cent growth over fiscal 2024. The increase in scale is expected to enhance profitability margins, besides strengthening credit profiles. According to the rating agency, this growth in MRO space will be fueled by fresh demand for maintenance services emanating from rising operating fleet size of Indian aircraft carriers - expected to grow by up to 20-25 per cent by next year.
It will be aided by new aircraft getting added and grounded aircraft (post-engine-related issues) resuming operations. Additionally, the reduction in Goods and Services Tax (GST) on aircraft components and services not only positions domestic MROs more competitively with their overseas competitors but also ease their working capital blockage. This along with players’ improving profitability will have MRO players savouring improved credit profiles over the medium term.
Indian MRO players typically provide three types of services, Line checks (undertaken before every take-off), Airframe checks (every 12-18 months which involves grounding the aircraft for 3-4 weeks) and Redelivery checks (at the time of expiry of the lease period of 6-7 years). Shounak Chakravarty, Director, Crisil Ratings, said ‘While line and airframe checks are strongly correlated with aircraft fleet size, redelivery checks are likely to grow multifold next fiscal (up to 10 times over fiscal 2024 levels). This will be driven by the reduction in GST input tax, to 5 per cent on all aircraft components, which may lower the component-related expenditure and place Indian MROs on par with their Asian competitors. Their intrinsic cost advantages will further help Indian MROs gain market share.’
