Global brokerages maintained a bullish view on Larsen Toubro after the company on Saturday announced that it would take up a proposal for share buyback on August 23, Thursday.
CLSA said that the buyback will support return on equity (RoE) of the company.
It may not be the last buyback as cash on books stand at $2.1 billion.
We maintain buy on LT with a target price of Rs 1,730, CLSA added.The scrip was trading 4.32 per cent up at Rs 1,293.90 around 9.45 am (IST), while the BSE Sensex was up 258 points, or 0.68 per cent, at 38,206.72 around the same time.
Macquarie retained outperform view on LT with a target price of Rs 1,825.
Buyback sends willingness to return capital", Macquarie said.
Quantum of buyback will hold the key, the foreign brokerage added, which expects cash flows to remain comfortable in FY19.The engineering and construction conglomerate on Saturday informed bourses that the board will consider the proposal for buyback of shares on August 23.
It also announced that the trading window for dealing in securities will be closed for directors and officers and designated employees of LT from August 20 to August 24 - both days inclusive.
This is in line with the company's internal code for prevention of insider trading.The company last month reported a 43 cent increase in consolidated net profit at Rs 1,472 crore in the June quarter.
It had earned net profit of Rs 1,028 crore in the same quarter last year.