Shares of Larsen & Toubro Ltd (L&T) will turn ex-date for dividend on Wednesday. The construction and engineering major had declared dividend of Rs 24 and special dividend of Rs 6 per share, along with its quarterly earnings. The record date, for the purpose of determining name of the eligible shareholders for dividends, is today. All eligible L&T shareholders with their names in the list at the end of Wednesday will be eligible to receive dividend.
The actual dividend payments will be made on August 14. L&T announced a total dividend of Rs 18.60 per share in FY23, and Rs 18 each in FY22 and FY21. YES Securities expects the company to announce Rs 25.10 per share dividend in the ongoing financial year and Rs 35.80 in FY25.
To recall, L&T also announced a share buyback of 3.33 crore shares at a maximum price of up to Rs 3,000 per share and consideration of up to Rs 10,000 crore. Analysts said the L&T management is confident on its return on equity (ROE) target of 18 per cent by FY26, driven by strong business outlook, prudent balance sheet management and returning surplus cash to shareholders.
Improved cash distributions along with lower asset intensity should help L&T get closer to its targeted ROE from 12.2 per cent in FY23, said JM Financial, which has maintain 'Buy' on the stock, with a target of Rs 2,834.
L&T's recent June quarter results were a beat on top and bottom line fronts, but the operating margin missed the Street estimate. Despite strong show in June quarter, the management has maintained its revenue guidance of 12-15 per cent growth and order inflow guidance of 10-12 per cent for FY24 after considering the possible softening in awarding activity in 4QFY24 on account of general elections.
"We expect the management to revise its guidance upwards if awarding and execution momentum is maintained in Q2FY24. Given the record orderbook of Rs4.1tn, robust prospect pipeline of Rs10tn, controlled NWC environment and improving development business dynamics, we maintain our ADD rating on the stock with revised target price of Rs2,892 (Rs2,246 earlier
Kotak Institutional Equities said L&T reported a sharp 12 per cent beat in core E&C (engineering and construction) Ebitda in spite of sub-par margins. Healthy ordering levels boosted growth visibility for attaining the higher end of the unchanged business guidance range, it said adding that working capital levels continued to defy seasonality and grow return on equity (RoE).
"The Saudi boost to ordering ensured the rem-FY2024 order pipeline for L&T is up over 30 per cent YoY. We increase our ordering estimates by 4 per cent and FV by 9 per cent to Rs 2,400 on roll-forward. Our 'Reduce' stays on expensive valuations," it said.