L&T scales fresh peak as company raises buyback price; stock has rallied over 50% in one year

L&T share buyback update: Shares of construction and engineering major Larsen & Toubro (L&T) rallied as much as 3.9 per cent to scale a fresh peak of Rs 3,008 apiece in the opening deals on Tuesday (September 12), a day after the company raised its share buyback price by Rs 200 to Rs 3,200. The stock finally ended at Rs 2942.80, up 1.68 per cent.

The company also announced that the maximum number of equity shares proposed to be bought back by the company has been reduced from 3,33,33,333 (three crore thirty-three lakh thirty-three thousand three hundred and thirty-three) fully paid-up equity shares to 3,12,50,000 (three crore twelve lakh fifty thousand) equity shares, representing 2.22 per cent of the total paid-up equity shares of the company.

In July, while announcing its June quarter numbers (Q1 FY24), L&T announced a buyback worth Rs 10,000 crore. The company reported a 46.5 per cent year-on-year (YoY) jump in consolidated net profit to Rs 2,493 crore for the quarter ended June 30, 2023. L&T's revenue from operations came in at Rs 47,882 crore for the first quarter of the current financial year, up 34 per cent compared with the corresponding period a year ago.

The infrastructure conglomerate reported Rs 4,869 crore in earnings before interest, taxes, depreciation, and amortisation (EBITDA), up 23 per cent compared with the year-ago period.

L&T share price

Shares of the company have jumped over 50 per cent in the last one year, Trendlyne data show. 

L&T's 'big order'

Earlier this month, L&T's Group Chairman AM Naik, in an exclusive interaction with Zee Business channel, said that the company will soon receive a big overseas order worth Rs 25,000 crore and after a few days, media reports suggested that the company has won contracts worth Rs 32,400 crore from Saudi Aramco for Phase II of the Jafurah unconventional gas development.

The group chairman, in the interview with Zee Business, further said that they had received a Rs 26,000 crore order for the bullet train project, the biggest so far for the company. Naik added that technology will keep changing, but there will always be a need for infrastructure. "Our 50–60 per cent work will always be in demand, and the rest, 40 per cent will keep fluctuating with changing times and technologies. We have top-class hi-tech hardware," Naik said in the exclusive interaction. READ MORE

What analysts say 

ICICI Securities, in its September 8, 2023 report, said that they have upgraded the stock to 'BUY' with a target price of Rs 3,141 per share. "We have upgraded the stock to buy on strong consecutive order inflow for two quarters (Q1, Q2FY24), which could likely result in beat-to-order inflow guidance for FY24, a significant buyback to reward shareholders, and consequent improvement in RoE." The brokerage expects margin improvement in Q4 and FY25E for core business amidst benign raw material (RM) prices.