Kotak Securities has raised the target price on the shares of Larsen & Toubro as the research firm sees a slew of benefits flowing to the company post the inauguration of Hyderabad Metro. The first phase of Hyderabad Metro Rail project all set for inauguration on November 28 by Prime Minister Narendra Modi. Kotak Securities says that the recently notified fares would support Hyderabad metro’s initial financials. L&T Metro Rail (Hyderabad) has fixed a minimum fare of Rs 10 for a distance of up to two kilometres and the maximum fare is Rs 60 for a distance of more than 26 kms. The project cost at the time of signing of concessionaire agreement in 2010 was Rs 14,132 crore. Kotak Securities says that the fares fixed by L&t are are ahead of the recently revised Delhi metro fares by 0-17%. Further, the firm has valued Hyderabad Metro at 0.5x equity book.
Track live stock price: Larsen & Toubro
Kotak Securities has revised the target price on the shares to Rs 1,370 from Rs 1300 earlier. L&T shares were trading at Rs 1,215, down by more than 0.75%. Kotak Securities target price implies an upside of more than 12.5% from the current market prices. L&T shares have returned more than 36% in the year so far.
Each train in the Hyderabad Metro would initially have three coaches and 330 people can travel in each train. Under the project, sky-walks will be also be built connecting the stations directly to commercial complexes, stadiums and offices, Telangana’s Information Technology Minister K T Rama Rao said. Asked about the deadline for the completion of the entire project, Rao said it should be ready in one year’s time.
The L&T Metro Rail (Hyderabad) has already installed sophisticated CCTV cameras at all the stations and in trains. HMRL’s Managing Director N V S Reddy earlier said that several measures have been taken up to ensure a comfortable travel for the disabled people also. Hyderabad Metro Rail Limited was formulated in May 2007.
