Indian MRO Industry Set for 50% Growth by FY26

The Indian MRO industry is anticipated to grow by 50% to Rs 4,500 crore by FY26, driven by increased fleet demands and GST reductions, improving competitiveness. The rise in operations will enhance profitability and credit profiles amidst growing service offerings and demand for aircraft maintenance.

The Indian aircraft maintenance, repair and overhaul (MRO) industry is poised for a 50% growth, reaching Rs 4,500 crore by fiscal year 2026, fueled by the expanding fleet sizes of airline operators, according to a report by Crisil Ratings.

This growth will be supported by a reduction in GST on aircraft components and services, enhancing the competitiveness of domestic MRO players compared to international counterparts and easing their working capital pressures. Increased fleet growth expected at 20-25% next year will further drive this trend, enabled by additional aircraft acquisitions and the return of grounded aircraft.

Despite currently handling only 14% of total MRO spends, Indian MROs are expanding their service range to capture a larger market share. Operational scale and profit margins are set to improve with a segmental shift towards high-margin redelivery services, which will also bolster cash flow and enhance credit profiles moving forward, said Crisil Ratings.

(With inputs from agencies.)