L&T shares rise nearly 4% on hike in buyback price

Larsen & Toubro (L&T) stocks opened higher on Tuesday after the infrastructure major announced an increase in its share buyback price. The L&T share price gained as much as 3.6% in opening trade to ₹2,998 against the previous closing price of ₹2,894.05 on the BSE.

The engineering and construction major has raised the buyback price from ₹3,000 to ₹3,200 per share for its proposed ₹10,000 crore share buyback. This is going to be the first buyback by the conglomerate in its 85-year-long history.

L&T has also reduced the maximum number of equity shares proposed to be brought back to 3,12,50,000 shares, representing 2.22% of the fully paid up equity share capital of the company. It had earlier proposed to buy back 3,33,33,333 shares, or 2.24% of the company’s equity capital.

“One of the key objectives of the company’s strategic plan, Lakshya ’26, is to enhance the return on equity (ROE) and thereby maximise shareholder value. Return on equity capital to the shareholders in the form of buyback of shares of the company is a step in that direction,” L&T says in a BSE filing on Monday.

On 26 July, the board of L&T, while announcing its first quarter earnings report, had approved the buyback of equity shares of up to ₹10,000 crore at ₹3,000 per share, a premium of 17% to the company’s market price of ₹2,562 then.

For the April-June quarter of FY24, L&T posted a 46.5% year-on-year (YoY) growth in consolidated net profit at ₹2,493 crore from ₹1,702 crore in the corresponding quarter of the previous year.

The consolidated revenue stood at ₹47,882 crore for Q1 FY24, recording a YoY growth of 34%, primarily aided by the execution of a healthy opening order book in its projects and manufacturing portfolio. International revenues during the quarter at ₹19,022 crore, constituting 40% of the total revenue, the company said in a BSE filing.

L&T’s Earnings before Interest, Tax, Depreciation and Amortisation (EBITDA) came in at ₹4,869 crore, which was 23% higher as compared to ₹3,953 crore in the same period of the last fiscal. EBITDA margin stood at 10.2% as against 11% in the corresponding quarter of the previous fiscal year.

As of June 30, 2023, the consolidated order book stood at ₹412,648 crore, with international orders having a share of 29%. During the quarter under review, the company received orders worth ₹65,520 crore at the group level, registering a YoY growth of 57%. International orders were at ₹27,646 crore during the quarter, comprising 42% of the total order inflow.

The board of the company declared a special dividend of ₹6 per equity share, i.e. 300% on face value of ₹2 each, for the financial year 2023-24. The record date for the purpose of payment of dividend is August 2, 2023, while it will be paid on or before August 14, 2023. 

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