Stable operating performance in infrastructure sector for FY25; Ind-Ra

24 May 2024 CW Team

Ind-Ra attributes the stable outlook on the infrastructure sector to various factors, including stable operating performance expectations for most projects, sustained revenue visibility under concession agreements and power purchase agreements, and an anticipated increase in cargo and traffic volumes.

In the power sector, Ind-Ra forecasts the total installed capacity to reach approximately 476 GW by FY25, compared to 440 GW as of March 2024. Bharat Kumar Reddy, Associate Director, India Ratings and Research, highlighted a significant growth in peak demand by almost 13% during the last fiscal year, with a reduced deficit of 1.5% attributed to improved coal supply.

Regarding toll roads, Ind-Ra maintains a stable outlook, expecting a moderation in toll collection growth to around 6-7% in the current fiscal year compared to double-digit growth seen in previous years. Rishabh Jain, Associate Director, Ind-Ra, mentioned an anticipated revenue growth of 5-7% with toll revisions post-elections.

The agency retains a stable rating outlook on projects under the hybrid annuity model for FY25, citing sustained high competition, unresolved land-related issues, and lower awarding activity in recent years as contributing factors that could lead to aggressive bidding and potential stress build-up in the sector.

Ports are expected to remain stable, with a growth rate of approximately 6-7%. The positive outlook for airports is supported by steady traffic growth and increasing non-aero revenues. Post-COVID, airport traffic has shown robust growth, accompanied by rising non-aeronautical income, indicating higher passenger spending at airports. Additionally, improvements in the regulatory framework, including reduced delays in tariff order implementations, contribute to a more stable regulatory environment for airports, further bolstering the positive outlook for the sector. (ET Infra)

India Ratings and Research (Ind-Ra) anticipates a stable operating performance across most infrastructure projects in the current fiscal year. The agency maintains a stable outlook on the infrastructure sector as a whole, including the transport segment, indicating minimal likelihood of rating changes in the near to medium term. Notably, a positive outlook is assigned to the airport segment, suggesting a high probability of rating upgrades in the near to medium term. Ind-Ra attributes the stable outlook on the infrastructure sector to various factors, including stable operating performance expectations for most projects, sustained revenue visibility under concession agreements and power purchase agreements, and an anticipated increase in cargo and traffic volumes. In the power sector, Ind-Ra forecasts the total installed capacity to reach approximately 476 GW by FY25, compared to 440 GW as of March 2024. Bharat Kumar Reddy, Associate Director, India Ratings and Research, highlighted a significant growth in peak demand by almost 13% during the last fiscal year, with a reduced deficit of 1.5% attributed to improved coal supply. Regarding toll roads, Ind-Ra maintains a stable outlook, expecting a moderation in toll collection growth to around 6-7% in the current fiscal year compared to double-digit growth seen in previous years. Rishabh Jain, Associate Director, Ind-Ra, mentioned an anticipated revenue growth of 5-7% with toll revisions post-elections. The agency retains a stable rating outlook on projects under the hybrid annuity model for FY25, citing sustained high competition, unresolved land-related issues, and lower awarding activity in recent years as contributing factors that could lead to aggressive bidding and potential stress build-up in the sector. Ports are expected to remain stable, with a growth rate of approximately 6-7%. The positive outlook for airports is supported by steady traffic growth and increasing non-aero revenues. Post-COVID, airport traffic has shown robust growth, accompanied by rising non-aeronautical income, indicating higher passenger spending at airports. Additionally, improvements in the regulatory framework, including reduced delays in tariff order implementations, contribute to a more stable regulatory environment for airports, further bolstering the positive outlook for the sector. (ET Infra)

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