India’s MRO industry revenue to grow 50% in FY26 compared to 2024- Crisil

New Delhi New Delhi: Domestic aircraft maintenance, repair and overhaul (MRO) industry revenues will cross Rs 4,500 crore in FY26, an impressive 50 per cent growth over FY24, Crisil Ratings said in a report. Increase in scale is expected to increase profitability margins, while also strengthening the credit profile.

According to the rating agency, this growth in the MRO sector will be driven by fresh demand for maintenance services generated by the increasing operational fleet size of Indian aircraft carriers – expected to grow by 20-25 per cent by next year. This will be helped by the addition of new aircraft and resumption of operations of grounded aircraft (following engine-related problems).

Additionally, the reduction in Goods and Services Tax (GST) on aircraft components and services will not only put domestic MROs in a more competitive position with their foreign competitors but will also reduce their working capital constraints. This will also benefit MRO players from improved credit profile in the medium term due to improved profitability of the players.

Indian MRO players typically offer three types of services, line checks (done before every flight), airframe checks (every 12-18 months which involves grounding the aircraft for 3-4 weeks) and redelivery checks (at the end of a 6-7 year lease period).

Shaunak Chakraborty, director, Crisil Ratings, said, “While line and airframe checks are strongly correlated with aircraft fleet size, redelivery checks are expected to grow manifold next fiscal (up to 10 times FY24 levels). This will be driven by a 5 per cent reduction in GST input tax on all aircraft components, which could reduce component-related expenditure and bring Indian MROs at par with their Asian competitors. Their intrinsic cost advantages will further help Indian MROs gain market share.”