Telangana govt to take over Hyderabad metro from L&T

Shares of L&T surged on Friday after the Telangana government agreed to take over the first phase of the Hyderabad Metro Rail project and clarified key financial aspects. On September 26, L&T shares jumped over 3.5%, reaching a nine-month high.

Following discussions between the company and the state, L&T decided to step back from the metro project due to ongoing operational losses. The Telangana government will assume around ₹13,000 crore in project debt and pay approximately ₹2,000 crore to L&T.

L&T is exploring options to sell non-core assets of the Hyderabad Metro to reduce risk.

For the fiscal year 2025, L&T’s metro rail revenue stood at ₹1,108.54 crore, down nearly 21% from ₹1,399.31 crore in the previous year. The company is paying interest of around ₹240-250 crore on loans totaling roughly ₹12,500 crore. As a result, L&T recorded a loss of about ₹208 crore in the first three months of fiscal 2026.

Experts believe that once the Hyderabad Metro’s debt is reduced, L&T’s return on equity (ROE) could rise to around 18%. Stepping away from the metro project helps the company avoid the risk of ongoing losses eroding profits from other projects, allowing L&T to stabilize financially.