L&T Looks to Exit from Hyderabad Metro Project Amid Mounting Losses

As per news reports, Larsen & Toubro Limited (L&T), one of India’s largest infrastructure firms, has conveyed its intention to offload its majority stake in the Hyderabad Metro Rail project. 

With operational challenges, delays, and persistent financial strain, the company has approached both the Telangana and central governments, suggesting that a new Special Purpose Vehicle (SPV) could take over the metro’s operations and future expansion phases.

Financial Strain and Lack of State Support

In a communication to the Ministry of Housing and Urban Affairs (MoHUA), L&T Metro Rail pointed out that despite multiple requests, the Telangana government has not extended the required financial assistance. 

This has worsened the financial burden on the concessionaire. The company’s annual report highlighted that revenues fell from ₹1,399.31 crore in FY 2023-24 to ₹1,108.54 crore in FY 2024-25, marking a 21% decline. Simultaneously, losses widened to ₹625.88 crore under review, a 13% increase compared to the previous year.

In March 2017, claims worth ₹3,756 crore were submitted to the state government, later swelling to ₹5,000 crore by the time of full commissioning in February 2020.

Pandemic Impact and Exit Proposal

Even after the metro’s commissioning, financial stress persisted. The Covid-19 pandemic forced a complete shutdown for 169 days, while the subsequent rise of work-from-home practices significantly reduced ridership. The company’s financial distress has left it unable to join the Telangana government’s plans for Phase II A and Phase II B expansion under the public-private partnership model.

L&T’s letter emphasised that under these strained circumstances, it remains open to transferring its equity stake to the Government of Telangana or the Government of India through a new SPV, which would oversee both the existing metro operations and the proposed expansion phases.

Read More: L&T Wins Big in Mumbai-Ahmedabad Bullet Train Project!

L&T Share Price Performance 

As of September 16, 2025, at 9:52 AM, L&T share price is trading at ₹3,608.30 per share, reflecting a surge of 0.62% from the previous closing price.

Conclusion

The Hyderabad Metro, once seen as a benchmark for large-scale urban infrastructure under the PPP model, is facing uncertainty as its concessionaire struggles with mounting losses and weak ridership recovery. L&T’s decision to seek an exit underscores the financial vulnerabilities of mega transit projects and places the onus on governments to determine the future course of this critical public transport system.

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