L&T hopes Hyderbad Metro ridership to improve once IT sector employees return to offices

Hyderabad Metro

Infrastructure major Larsen & Toubro is hoping that stricter mandates by Information Technology (IT) companies to their employees to return to working from office will help drive ridership in the Hyderabad Metro Project, L&T's Chief Financial Officer R Shankar Raman said on May 8.

"The IT industry employees need to come to the office; they are not yet coming to office, but will hopefully return soon," Shankar Raman said in a post-earning conference call after the company declared its Q4FY24 earnings.

He added that while some IT companies have announced that employees would be entitled to promotions and increments if they return to corporate offices, it is yet to be seen whether employees are willing to leave the comfort of work-from-home.

Larsen & Toubro will slow down its divestment plans in 2024-25 and will primarily focus on restructuring the debt and improving ridership in Hyderabad Metro, Shankar Raman said.

"Most of the big divestments that we had planned are done, the plan for 2024-25 will be to restructure Hyderabad Metro (debt)," Raman added.

He further said that in the Hyderabad Metro project, L&T will need to get the capital structure correct by reducing the debt associated with the project.

Last year, L&T has availed of Rs 900 crore of the Hyderabad metro soft loan approved by the Andhra Pradesh government and has used it to repay the debt of the project.

Back in December 2023, Raman had said that the daily ridership of Hyderabad Metro has risen to a peak of around 5.5 lakh passengers in the quarter ended December 2023 from 5 lakh daily passengers in the previous quarter.

Earlier this year, the state government of Telangana decided to provide a Rs 3,000 crore soft loan to L&T and allowed the company to sell or lease some of the land parcels that were handed over to the company as part of the concessionaire agreement.

L&T plans to reduce Hyderabad Metro's debt burden to Rs 8,000 crore after taking the interest-free loan from the government and also monetise 260 acres it owns.

L&T Hyderabad Metro Rail has a debt burden of 13,000 crore, this is apart from the Rs 2,000 crore loss the company has suffered in the past few years.

L&T on May 8 reported a consolidated net profit for the quarter ended March 2024 at Rs 4,396 crore, up 10 percent compared to Rs 3,987 crore in the same quarter last year and Rs 3,621 crore in the same quarter in 2022-23.

Its revenue from operations for the quarter stood at Rs 67,079 crore, registering a growth of 15 percent from Rs 58,335 crore a year ago and Rs 52,851 crore in the same quarter in 2022-23, the company said in an exchange filing. The share of international revenues during the quarter was 45 percent.