Larsen & Toubro (L&T) shares gained 3%, hitting a lifetime high of Rs 2,572.80, after it announced its first share buyback. L&T will deliberate a suggestion for equity share buyback and a special dividend on equity shares for FY2023-24 during its board meeting on July 25.

At 9:29 am, shares traded 2.6% higher at Rs 2,555.25 on the BSE.

The buyback of equity shares will follow the Companies Act, 2013 provisions and SEBI (Buyback of Securities) Regulations 2018. If approved for a special dividend, the record date for determining the privilege of the equity shareholders for the said dividend shall be Wednesday, August 2, 2023.

The total number of equity shares has not been disclosed. 

In August 2018, the company’s BOD approved a buyback of 4.29% of its paid-up equity capital, amounting to Rs 9,000 crore. Unfortunately, the proposal did not receive SEBI sanction amid compliance issues amid the increased debt on the company’s books. This led to L&T dropping its buyback plan.

The new buyback proposal comes after the firm turned debt-free last year, announcing its results on July 25.

On July 21, 2023, the National High-Speed Rail Corporation Limited (NHSRCL) officially gave the decree to construct the 135.45 km stretch MAHSR – C3 package of the prestigious Mumbai Ahmedabad High-Speed Rail Project to L&T’s Heavy Infrastructure business.

The MAHSR – C3 package includes viaducts constructions, stations, major river bridges, depots, tunnels, earth structures, stations, and further auxiliary works.    

The 508 km Mumbai-Ahmedabad Rail project, also called the MAHSR Bullet Train, will cover 155.76 km in Maharashtra, 4.3 km in Dadra & Nagar Haveli and 348.04 km in Gujarat with 12 stations on the route. Post completion, the High-Speed Rail will function at 320 Kmph speed, covering the entire distance in 2 hours with limited stops and in 3 hours with all stops.

L&T will implement 92% of the main line between Shilphata in Maharashtra and Ahmedabad in Gujarat. L&T has enhanced its competence in building faster and more consistent mass transit systems, and this project aligns with its strategic goals.

In earlier weeks, L&T had won India’s largest defence acquisition project at EUR 5 billion. The company signed a teaming agreement for Project 75 (India) submarine program.

According to Kotak Institutional Equities, the company reports a 12% YoY upgrade in core Engineering Procurement and Construction revenues amid improved construction activity across projects during the quarter. 

Sharekhan sees L&T’s revenue growth of 18%, with a 21 bps expansion in operating margin and about 29% surge in net profit in the June quarter.