TCS and HCL Tech Distribute 94% of FY25 Profits as Dividends

23 Apr 2025 , 03:38 PM

India’s leading IT giants TCS and HCL Technologies announced record-high dividend payouts for FY25, underlining their commitment to capital allocation policies and shareholder value, even in a challenging macro environment.

Tata Consultancy Services (TCS) announced a Q4FY25 final dividend of ₹30 per share, aggregating the annual dividend payout to ₹126 per share in FY25. The dividend payout ratio for TCS jumped to 94% in FY25, significantly from 58% in FY24, which is a testimonial to its strong cash position and return on capital strategy.

TCS total dividend payment was at ₹44,962 crore for the year, of which around ₹32,300 crore will be paid to its parent Tata Sons with a holding of 71.8% as of March 2025. HCL Technologies, India‘s third-largest IT firm, declared a final dividend of ₹18 per share, taking the full-year dividend to ₹60, up 15.4% on year.

The overall dividend payout by HCL Technologies for FY25 was ₹16,250 crore, with a high dividend payout ratio of 93.5%, in keeping with the company‘s commitment of capital returns. HCL Technologies recorded its 89th straight quarter of dividend payout, reiterating its policy of regular shareholder returns.

Contrastingly, Infosys followed a more conservative approach to dividend payouts, announcing an aggregate dividend of ₹43 per share for FY25, equating to a payout ratio of 67%.

The reduced promoter stake in Infosys at 14.6% (contrastingly with TCS at 71.8% and HCL Tech at 61%) may be the reason for its more conservative way of distributing capital. In spite of subdued earnings expansion, both TCS and HCL Tech continued with aggressive share buyback policies. TCS posted a 6% YoY expansion in net profit at ₹48,553 crore its weakest growth in three years.

HCL Technologies posted an 11% YoY jump in net profit to ₹17,390 crore, while continually increasing its dividend payout over the years. In the past five years, HCL Tech‘s dividend payment has increased at a CAGR of 54%, far higher than its net profit CAGR of 9.5%, reflecting a shareholder-centric mindset.

In October 2021, HCL Tech had promised to return a minimum of 75% of its FY22-FY26 net income, a target it has repeatedly beaten, with payout ratios of 88% (FY22 & FY23), 90% (FY24), and now 93.5% (FY25). It is worth mentioning that these last dividends are subject to shareholders’ approval at the forthcoming Annual General Meetings (AGMs).