By Avishek Banerjee
Copyright republicworld
Larsen & Toubro (L&T) shares jumped over 3% to Rs 3,760 on the NSE on Friday, becoming the top gainer on the NIFTY50 amid a broader market downturn. The rally comes after the Telangana government agreed to take over Phase I of the Hyderabad Metro Rail project, paying Rs 2,000 crore for L&T’s equity in the concessionaire and assuming the project’s debt of Rs 13,000 crore.L&T holds nearly 90% equity in the 70 km Metro project. The company had earlier expressed interest in offloading its stake, citing operational challenges, accumulated losses, and delays caused by factors beyond its control such as property acquisition, utility shifting, and alignment changes.The agreement was reached following discussions between Telangana Chief Minister A. Revanth Reddy, senior state officials, and L&T Group CMD S.N. Subrahmanyan. The move is expected to expedite Phase II approvals from the central government. Market analysts see this as a positive development for L&T, removing a major financial overhang and setting the stage for renewed growth in its stock.Financially, L&T Metro Rail Hyderabad reported a revenue of Rs 1,108.5 crore for FY25, down 21% from Rs 1,399.3 crore the previous year, while losses widened to Rs 625.9 crore. The company posted a loss of Rs 208 crore in Q1 FY26, slightly lower than the Rs 214 crore loss in Q1 FY25. EBITDA rose to Rs 112 crore from Rs 101 crore in the same quarter last year.Also Read: What Are ESG Bonds? L&T First To Declare Rs 500 Crore Green Bond In India | Republic WorldThe Hyderabad Metro network spans 69.2 km across three elevated corridors, with fares recently increased by 20% to boost revenue. The project’s debt is largely financed by a consortium of 10 lenders, including State Bank of India, with annual interest obligations of around Rs 240–250 crore.Beyond infrastructure, L&T is actively pursuing growth in defence and technology. The company recently announced a strategic partnership with Bharat Electronics Limited (BEL) for the 5th-generation fighter (AMCA) programme. It is also developing semiconductor products, with its semiconductor unit eyeing an IPO after crossing $500 million in revenue.The Telangana government takeover not only provides clarity on L&T’s financial exposure but also strengthens the company’s focus on its high-growth and strategic business segments, paving the way for a potential surge in shareholder value.
