L&T says board will consider share buyback at meeting next week

This is the second time in its history that the company will consider such a move

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Larsen & Toubro (L&T) said on Thursday it will consider a buyback of equity shares at its upcoming board meeting on July 25, along with the special dividend for FY24.

The engineering conglomerate’s board is scheduled to meet to approve financial results for the June-23 ended quarter. This is the second time L&T will consider a share buyback.

L&T’s board in August 2018 approved its first buyback in 80 years of the company’s history, for up to 4.29 per cent of its paid-up equity capital, aggregating to a value of about Rs 9,000 crore. The proposal was turned down by the market regulator citing compliance issues over its post-buyback debt-equity ratio.

A M Naik, group chairman of L&T, in the FY23 annual report, said the company is committed to continue its focus on cash generation, pursue prudent capital allocation, maintain a healthy leverage and cash balances, and distribute it to shareholders on a regular basis.

The report said L&T ended the last financial year with a reduction in the debt levels to Rs 18,151 crore at the standalone entity level. It has a gross debt to equity ratio at 0.25 times and a healthy cash balance at about Rs 24,300 crore to equip the company to deal with "business uncertainties".