The truck finance industry, which was in doldrums for more than one and a half years because of a ban on mining and the economic slowdown, is finally showing signs of revival due to a revision in freight rates and drop in costs.
A revival in industrial activity is likely to result in higher utilisation of commercial vehicles from the second half of FY15.
A boost in corporate capital expenditure along with the infrastructure projects cleared by the Cabinet Committee on Investments in the past few months will fuel demand further.
An analyst said, "We expect the truck finance business to revive from the second half of this year with a pick-up in industrial growth and corporate capex investments, leading to higher utilization of existing trucks, and later, demand for new financing."
Rising freight rates have pushed up the resale value of trucks, according to a senior official of Shriram Transport Finance.
He added that "So we also see an uptick in demand for new and used trucks."