Although India Inc reported a good jump in profits for FY24, an increase of nearly 25%, the dividend payout ratio for companies that have announced results so far, at 34.83%, is the lowest in the last five years. The somewhat conservative approach to rewarding shareholders is surprising at a time when business has been reasonably good.
Only 1,009 companies – or less than half the number of 2,832 companies that have declared their results – have paid out dividends to the tune of `4.04 trillion for FY24. The total net profit reported by these 1,009 companies is close to `12 trillion. In the previous year or FY23, a set of 1,151 companies had paid out a sum of `4.14 trillion as dividends.
Even larger companies have been much less generous this time around. For 49 companies in the Nifty 50 basket, the dividend payout ratio fell fairly sharply from 42.5% in FY23 to 37.1% last year. That’s despite the fact that the net profits of this universe increased by a smart 21% to `6.55 trillion in FY24. Of course, in absolute terms, the amount paid out went up by 6% to `2.4 trillion. This sum is approximately 60% of the total dividend paid out to shareholders.
TCS topped the charts for the third straight year, paying `26,412 crore, although this sum was much smaller – down 37%– than in FY23. Infosys was at the second spot paying `19,094 crore, marking a 35.4% jump.
Other top dividend-paying firms included ITC (`17,166 crore), IOCL (`16,945 crore) and Coal India (`15,715 crore). However, dividend payments by Anil Agarwal-led Vedanta and Hindustan Zinc, saw a sharp decline of 71% and 83%, respectively.