• Wed. Nov 29th, 2023

    Critical Thought

    Critical thoughts on quantum technologies

    IT majors diverge in interim dividends: Exploring the financial landscape

    ByByron Bekker

    Nov 20, 2023
    IT majors diverge in interim dividends: Exploring the financial landscape

    Chennai, Oct 17 – As the software industry continues to thrive, leading IT majors are making headlines with their interim dividends. Infosys Ltd (NS:), one of the major players in the field, has been steadily increasing the quantum of dividends offered to shareholders in recent years. However, while Infosys leads in terms of dividend per share, it lags behind in terms of dividend percentage.

    In its latest announcement of second quarter results for FY24, Infosys declared an interim dividend of Rs 18 per share, with a face value of Rs 5. This marks a consistent increase compared to previous years. In 2018, the company declared an interim dividend of Rs 7, followed by Rs 8 in 2019. Over the next three years, Infosys continued to raise the bar, declaring interim dividends of Rs 12 (2020), Rs 15 (2021), Rs 16.50 (2022), and Rs 18 this year – the highest since 2018.

    While Infosys has set its dividends on an upward trajectory, the percentage comparison paints a different picture. The interim bonus declared by Infosys this year actually works out to 360 percent. Interestingly, this figure falls short when compared to the interim dividends declared by Tata Consultancy Services Ltd (NS:) and HCL Technologies Ltd (NS:).

    In terms of percentage, TCS announced an interim bonus of Rs 9 per share, with a face value of Re.1 each. This translates to a staggering 900 percent, surpassing Infosys by a considerable margin. HCL, on the other hand, declared an interim dividend of Rs 12 per share, with a face value of Rs 2 each, resulting in a dividend percentage of 600 percent.

    It is worth noting that dividend percentage is always calculated based on the face value of a share. These figures paint an intriguing picture of the financial landscape within the software industry, where IT majors diverge in their approach to dividends.

    Frequently Asked Questions (FAQ)

    1. What is an interim dividend?

      An interim dividend is a dividend declared and paid by a company in the middle of its financial year. It is usually paid out before the company’s annual financial statements are finalized.

    2. How is dividend percentage calculated?

      Dividend percentage is calculated by dividing the dividend per share by the face value of the share and then multiplying the result by 100.

    3. Why do companies declare interim dividends?

      Companies may declare interim dividends to distribute profits to shareholders, especially if they have accumulated a substantial amount of profits during the year.

    4. Which IT majors have been leading in terms of dividends historically?

      While the current article focuses on Infosys, it is important to note that dividend trends can vary over time. Other IT majors, such as Tata Consultancy Services and HCL Technologies, have also been significant players when it comes to declaring dividends.

    (Source: The original article’s source is not provided.)