Popular Investment Bank, CLSA has stated that the 150 percent increase in fares by Larsen & Toubro’s Hyderabad Metro project is positive for the company as it will help reduce the start-up losses of the project and it has a ‘buy’ rating on L&T.
CLSA said that this fare hike will more-than-compensate for a 15 percent rise in its Capex and could reduce start-up losses by 23-30 percent. It also said that fare hike and Hyderabad realty improvement crystallizes a $458 million value for L&T’s metro subsidiary
CLSA also foretold that the metro could push up rentals and capital values along its corridors of Hyderabad. The First Phase of the project which was inaugurated by Prime Minister Narendra Modi began its commercial operations this morning.
