L&T Q1 profit surges 46%; announces first ever share buyback of ₹10,000 crore

Engineering and construction major Larsen & Toubro (L&T) on Tuesday released its June quarter earnings that topped analysts’ estimates and declared a special dividend of ₹6 per share for FY23. The board of the company also announced a share buyback worth ₹10,000 crore, the first ever in the company’s 85-year history. Ahead of Q1 results, L&T shares closed 1.67% lower at ₹2,561.95 apiece on the BSE.

For the first quarter ended June 30, 2023, 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 orders were received across diverse segments like rail, renewables, rural water supply, transmission & distribution, IT & office space and onshore & offshore verticals of the hydrocarbon business,” L&T said in the BSE filing.

Key decisions taken by L&T board

Special dividend

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. 

Additional investment in green energy

The board approved additional investment of an amount upto ₹506 crore in L&T Energy Green Tech, a part of the L&T Group. It also announced incorporation of a joint venture company for green energy business with an initial subscribed capital of ₹1 crore.

In a bid to cement its presence in the renewable energy space, L&T wants to expand its green portfolio and plans to invest up to $2.5 billion in the next 3-4 years.

Acquisition of Sapura Nautical Power

The board of the company also approved acquisition of the entire shareholding of Sapura Nautical Power Pte Ltd (JV partner) in L&T Sapura Offshore. Post completion of the acquisition, L&T Sapura Offshore will become a wholly owned subsidiary of the company.

₹10,000 crore share buyback

The board of L&T approved the buyback of equity shares of up to ₹10,000 crore at maximum price of up to ₹3,000 per share through the tender offer route. The company will buy back as many as 3.33 crore shares, representing 2.4% of the fully paid up equity share capital of the company. The floor price of the buyback is fixed at 17% premium from Tuesday’s closing level of ₹2,561.95 on the BSE. The details regarding share buyback will be announced later.

"The board of directors has approved a proposal to buy-back through the tender offer route equity shares of the Company for an aggregate amount not exceeding ₹10,000 crore (excluding tax on buy-back). The proposal is subject to the approval of shareholders," L&T says in the filing.