India’s aircraft MRO industry revenue to surpass Rs 4,500 cr

New Delhi: Riding on expanding fleet size and GST rationalisation, India’s domestic aircraft maintenance, repair and overhaul (MRO) industry is likely to see its revenue surpass Rs4,500 crore in fiscal 2026 (FY26), clocking an impressive 50 per cent growth over fiscal 2024, a report said on Monday.

The increase in scale will enhance profitability margins which along with range-bound debt levels should improve debt protection metrics and strengthen credit profiles, according to a Crisil Ratings report. This growth will be fuelled 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.

This will be aided by new aircrafts getting added and grounded aircrafts (post engine-related issues) resuming operations.

“While line and airframe checks are strongly correlated with aircraft fleet size, redelivery checks are likely to grow multi-fold next fiscal (up to 10 times over fiscal 2024 levels),” said Shounak Chakravarty, Director, Crisil Ratings.

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,” said Chakravarty. Additionally, 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 profile over the medium term, said the Crisil report.