India's MRO industry revenue in 2026 fiscal to rise 50% over 2024: Crisil

New Delhi [India], January 27 : 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, said Crisil Ratings in a report.
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, "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."
Notably, in fiscal 2024, only 14 per cent of the total MRO spends by Indian carriers was carried out by Indian MROs, Crisil asserted. This is mainly because, high-value, heavy maintenance checks, eg., engine checks and components overhauls, are usually contracted with overseas MROs due to capacity constraints and higher turnaround times of Indian MROs.
In addition to demand tailwinds, Indian MROs are also adding to their service repertoire which will improve their penetration upto 20 per cent by next fiscal.
The share could have been higher but for the time needed to ramp up hangar capacities, local ecosystem for aviation spare parts and extensive training/upskilling of manpower that will yield results only over the medium term, the rating agency asserted.