Tata Consultancy Services (TCS) has emerged as the most generous dividend payer in India’s information technology (IT) services sector, with the highest payout-to-net earnings share among its peers over the past five years.
India’s largest IT services exporter has distributed an average of 99.7 per cent of its annual consolidated net profit to shareholders through equity dividends and share buybacks during the five-year period. It is followed by Tech Mahindra with an average payout share of 91.2 per cent, and Infosys at 82.4 per cent. HCL Technologies (77 per cent) and Wipro (62.6 per cent) round out
the top five.
TCS has cumulatively returned about ₹2.06 trillion to shareholders since 2020-21 (FY21), nearly matching its ₹2.07 trillion in net profit over the same period.
In other words, TCS retains little of its recurring annual profit for reinvestment or acquisitions, in contrast to its peers, which exhibit higher levels of profit retention.
Together, the top five IT services companies have distributed around ₹4.15 trillion to shareholders over the past five financial years, against a combined net profit of ₹4.79 trillion. That translates into an average industry payout share of 87 per cent — more than triple the 27.4 per cent average among BSE Sensex firms, although the latter excludes share buybacks.
Business Standard’s analysis is based on the average payout share of the past five-years since companies report high variations in their payouts on an annual basis. Furthermore, this approach ratio provides a better sense of individual company dividend payout and profit retention strategy.
In FY25, TCS’ share of payout in net earnings fell to 92.5 per cent from 103.4 per cent the previous year. The company paid a total dividend of ₹44,888 crore, a 5.4 per cent decline from the record ₹47,467 crore disbursed in FY24. Its consolidated net profit, meanwhile, rose 5.8 per cent to ₹48,553 crore. TCS did not conduct any share buybacks in FY25, with all shareholder returns coming through dividends.
Infosys, India’s second-largest IT player, increased its payout share to 76 per cent in FY25 from 59.6 per cent a year earlier. Total dividend disbursement rose 29.8 per cent to ₹20,295 crore, compared with ₹15,631 crore in FY24, which included share buybacks. Net profit rose 1.8 per cent year-over-year to ₹26,713 crore.
Wipro reported a sharp drop in its payout share to 47.8 per cent in FY25 from 129 per cent the previous year. Its total shareholder payout fell 55.9 per cent to ₹6,282 crore, down from ₹14,247 crore in FY24. In contrast, net profit rose 18.9 per cent year-over-year to ₹13,135 crore.
HCL Technologies saw its payout share rise to 93.4 per cent in FY25 from 89.6 per cent the prior year. Dividend disbursement increased 15.5 per cent to ₹16,250 crore, while net profit grew 10.8 per cent to ₹17,399 crore.
Tech Mahindra’s payout share fell to 90.4 per cent in FY25 from 166.1 per cent the previous year due to a sharp rebound in earnings and a marginal decline in dividend payouts. The company paid ₹3,841.8 crore in dividends, down 1.9 per cent from ₹3,917 crore in FY24. Its consolidated net profit surged 80.3 per cent year-over-year to ₹4,251.5 crore, from a low base.