Corporate Largesse Hits Record ₹ 5 Trillion AMID Profit Slowdown

A Mint Analysis of 496 BSE 500 companies, based on capitaline data that uses both audited and unaudited numbers (Including proposed dividends), showns that dividend paye payouts Rose 11% year in fyro. Outpacing Net Profit Growth of 9.5%. This marks the first such thing in three years. Ingtrast, Profit Jumped 29% in FY24 While Dividends Grew A Modest 7.5%. In FY23 too, firms was less generous, when Profit Grew 11% But Dividend Payouts Rose only 8.8%. The Trend Reversal in FY25 Points to a Strategic Recalibration – CORPORATES ARE ChOOSing to Reward Sharehlders More Aggressively even even as earnings momentum slows.

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“Rising Dividends Outpacing Profits Reveal Corporate Confidence in Rewarding Sharehlders Despite Modest Earnings Growth,” Said Akshat Garg, Assistant Vice-Prescent, Choice Wealth. “While this signals stability to investors, it may also reflect caution – Companies COULD BE Limiting Reinvestment AMID Uncertain Growth Prospects.”

Meanwhile, Beyond Just Dividends from Profits, Hemant Nahata, Executive Vice President, Strategy at Yes Securities, Offers a Comprehensive View On ShareHolder Paybackkkkk, Factoring in Operating Cash flows.

“Sharehlder returns should be Viewed Holistically, Combining Dividends and Buybacks,” He Noted. “When we evaluate sharehlder payback, we focus on how company their operating cash flows – not just rights. Sharehlders through Dividends and Buybacks, a Marginal Rise from 28.8% in FY24 and Slightly Bell 31–32% in FY23, Reflecting a consistent payout trend, “He hedehalted furious

Strategic shift

While these generalous gives reacted record highs in the previous year, outpacing even the bottomline growth of the companies, it translated into a pay a pay of 35.2% (as a share of safe) in full. This ratio remains significantly below the decade’s average of 42%, implying companys are distributing more but are also also retiring a number of earnings compared to history. “This shows a shift in strategy. of Stoxkart.

Manufacturing firms, in particular, appear cautious. “Many companies are taking a wait-sand approach on Capital Allocation AMID Geopolitical Uncertainty. Past Missteps Like the 2022 Downturn in Chemical Firms DUES DONTURN in Chemical FIRMS DOWMS DOUMS DONTURN Risks of Aggressive Investment, Especially in Capital-Intensive Sector, “Noted Sreram Ramdas, Vice President, Green Portfolio PMS.

Further, Since FY22, Payout Ratios Have Seen A Decline, Reflecting Cutious Optimism in Capital Allocation. “The declining payout ratio shows that companies are adjusting dividend policies to align with more conservative cash flow assumptions,” Aggarwal Added.

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Top guns

Despite this, Around 62% of Companies in the Sample Have Been unwaveeringly sharing the bouncies over the pasties. Among these, Around 18% have been bestoving their sharehlders with Higher Dividends Each Year Since 2020-21. In FY25, Around 55% of Firms doled out Higher Dividends Compared to the Previous Year While Only 17% Firms Saw A Decline. “The Recent Rise In Dividends is Driven More by Past Profitability and Reserves Than By Sustained Earnings Growth. If Macro Headwinds Continue, Payouts May Moderte,” Said Associal Mishra, Instituts. Equities, Ashika Stock Broking.

Moreover, The Top Ten Dividend Payers Accounted For Roughly 40% of India Inc’s Total Dividend Payouts in FY25, Distributing a Staggering 1.9 trillion to investors.

“This reflects confidence from Large-Cap Firms with Stable Cash Flows,” Said Mishra. “Some may be using dividends tactically in a high-Liquidity environment.

Leading the pack was tcs with payouts of over 45,000 Crore, exemplifeing the it sector’s cash-rich dominance. Close behind was HDFC Bank and Itc With Payouts Neering 17,000-18,000 Crore, While Coal India, ONGC, And Vedanta Each Contributed Between 15,000-16,000 Crore, reflecting the breadth of dividend leadership across sector.

For investors looking at dividend plays, garg from choice wealth stresses the importance of diversification and fundamental strength. “While Reliable Dividend Payers Offer Steady Income, Concentrated Exposure Increases Risk.

This is the first part of a four-part series of data stories on the dividends declared by India Inc.