The company increased the ceiling of its current share buyback program to A$1.25 billion, up from the A$1 billion figure announced in August. This capital return follows a separate A$750 million buyback completed in June. In a further sign of fiscal confidence, Telstra raised its interim dividend to A$0.105 per share, surpassing analyst consensus that generally anticipated a payout of A$0.10 or less.

Capital Returns Drive Valuation

Analysts at Jarden noted that the buyback of A$637 million worth of shares during the December half underscores the underlying strength of the company's balance sheet. The market response pushed Telstra's valuation to levels not seen since February 2017, reflecting investor approval of the firm's strategy to return excess cash while maintaining growth momentum.

The stock has now rallied 30% since the start of 2025, outperforming the broader market as investors pivot toward defensive assets with strong yield profiles. Management’s decision to exceed dividend forecasts suggests a more robust outlook for the remainder of the fiscal year than previously modeled by the brokerage community.