We can consider share buybacks once every few years: R Shankar Raman, CFO, L&T

economictimes.indiatimes.com:

Driven by robust first quarter earnings and the first-ever buyback proposal of Rs 10,000 crore, engineering behemoth Larsen & Toubro’s stock touched all-time high of ?2,673.60 on the BSE, Wednesday. L&T's Chief Financial Officer, R Shankar Raman tells Kalpana Pathak that the company plans to consider a buyback once every few years. Edited excerpts:Your share price is doing well. Why did you decide on a buyback?We have surpluses beyond our requirements, not for all times to come, but at least for some time to come.

Given that, we thought that it is a good way to create value back to shareholders. One way to create value for shareholders is to keep distributing dividends. So we decided not to interrupt with that but to go for a buyback.

Around 10-15 years ago the company believed in creating value to shareholders by investing in hard assets. Now, through economic cycles, we have come to the conclusion that we should be capital light and return accretive. So, this switch in strategy made sure that we are exiting capital heavy businesses and unlocking the capital.

So every now and then, we could have a pool of surpluses and if all goes well, we can look at it as a part of a routine shareholder value program. Once in a few years to consider a buyback and steadily work on the dividend curve.How do you see the commodity prices, sticky inflation and rising interest rates a concern for your business going forward?I think interest rates have peaked. I'm looking to the rest of the year as stable, if at all, towards the end of the year, maybe some drop in interest rates.

So, a lot depends on obviously the monetary policy. But it looks like a 7% GDP growth with a 4-6% inflation band. So I'm reasonably confident that we will have