Shares of Larsen & Toubro (L&T) gained nearly 1 percent on July 24, hitting a lifetime high at Rs 2,607, after the company recently announced its first share buyback in its history. L&T will discuss a proposal for equity share buyback and a special dividend on equity shares for the financial year 2023-24 during its board meeting on July 25, today.
"Buyback of equity shares of the Company in accordance with the provisions of the Companies Act, 2013 and SEBI (Buyback of Securities) Regulations 2018. Special Dividend on equity shares for the financial year 2023-24. If approved, the record date for the purpose of determining the entitlement of the equity shareholders for the said dividend shall be Wednesday, August 2, 2023,” the company said in a filing to exchanges.
The total number of equity shares to be bought back by the company has not been disclosed. The outcome of this buyback will be communicated to the Stock Exchanges shortly after the conclusion of its Board meeting, L&T added.
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In August 2018, the company's board approved a buyback of up to 4.29 percent of its paid-up equity capital, amounting to around Rs 9,000 crore. Unfortunately, the proposal did not receive SEBI approval due to compliance issues while also citing concern about the increased debt on the company's books. This led to L&T shelving its buyback plan.
The new buyback proposal comes after the conglomerate turned debt-free last year.
The company will announce its results on July 25.
According to Kotak Institutional Equities, the company is seen reporting a 12 percent YoY improvement in core Engineering Procurement and Construction revenues as it builds in the improved construction activity across projects during the quarter. The brokerage firm believes lower commodity prices will aid margins.
Meanwhile, Sharekhan sees L&T posting a revenue growth of approximately 18 percent, with a 21 bps expansion in operating margin and about 29 percent surge in net profit during the June quarter.
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