India's highway toll collections are expected to bounce back after a subdued April-May season this year.
Accordingly, toll collections are expected to reach 4QFY21 revenues in 2QFY22 and record 15 percent growth beginning 3QFY22 over FY20 sans a third wave.
"These expectations are driven by the recovery in June 2021, stronger than the earlier seen in 2QFY21 during the first wave," India Ratings and Research (Ind-Ra) said in a research report.
In April and May 2021, average toll revenue fell by 10 percent and 34 percent respectively, compared to 4QFY21 owing to the localised lockdowns during second COVID wave.
However, the toll collections in June 2021 saw an upward trajectory, reaching 90 percent of 4QFY21 levels in the last week of June 2021.
"In the backdrop of adequate liquidity and a recovery in traffic, the cash flows of the projects rated above 'A' show considerable resilience to stress cases, reflecting ample cushion for timely debt servicing in potential downside scenarios."
Besides, the report said that implementation of a full or partial lockdown during April-June 2021 in several parts of the country had hit the people mobility impacting toll collections.
"Ind-Ra's sample study on 36 toll projects spread across 10 states indicates the average daily toll collections on a weekly basis reached a peak of 38 percent in the third week of May 2021, after a 17 percent fall in the last week of April."
"Ind-Ra expects a gradual relaxation in the lockdown measures with a drop in COVID cases and ramp-up in toll collections 2QFY22 onwards."
In addition, the report say FY21 witnessed a robust traffic recovery, erasing the traffic losses during the peak COVID-19 lockdown period.
"This was led by the faster adoption of private transportation and a swift commercial traffic recovery providing stability to toll revenues."
"The commercial traffic saw a quick recovery, given the movement of essential commodities and was in line with E-Way bills generation and fuel consumption trajectory while the COVID-19 spread continued to saddle the public transportation (buses) recovery."