Corporate India is likely to maintain its aggregate dividend payout for the financial year ended March 2009 despite a slowdown in overall earnings. 193 companies declaring dividend for 2008-09 have raised this hope with a dividend payout of 18.2 per cent of their net profit compared to 18.1 per cent in the previous financial year.
The 193 companies have proposed a dividend payout of Rs 16,764 crore for 2008-09 on a net profit of Rs 92,412 crore compared to Rs 15,328 crore paid on a net profit of Rs 84,790 crore earned in 2007-08. Of these, 67 have maintained their dividend payout, and 74 have raised the amount while only 52 have pruned their payout.
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A study of these 193 companies by BS Research Bureau indicates that dividend payout will be more or less subdued from the software services companies, while banks and financial services companies may increased the amount to be paid. Metal and automobile companies are likely to prune the amount, while cement, capital goods and consumer goods companies are expected to maintain payouts at last year's level.
The three frontline software companies — Infosys Technologies, TCS and Wipro — have showed diverse trend on dividend payouts. Infosys has not proposed any special dividend this year compared to a special dividend of Rs 20 per share paid in 2007-08. However, the company has raised the normal dividend by Rs 10.25 to Rs 23.50 for 2008-09 from Rs 13.25 in 2007-08.
TCS, the flagship technology company of the Tata group, has proposed to maintain per share dividend at Rs 14 with Rs 9 distributed during the first three quarters and has proposed a final dividend of Rs 5 during the annual results announcements. Wipro, with a three per cent decline in net profit, has proposed to prune dividend from Rs 6 to Rs 4.
Ferrous and non-ferrous metal firms are expected to prune dividends sharply due to lower profits. JSW Steel has announced a dividend of Rs 1 per share compared to Rs 14 paid in 2007-08. The company will distribute Rs 18.70 crore as dividend out of its annual profit of Rs 458.50 crore earned in 2008-09 compared to a dividend payout of Rs 261.87 crore on a net profit of Rs 1,728.19 crore in 2007-08.
Earlier, the BS Research Bureau's special study on dividends had indicated that out of the 1,320 dividend-paying companies, 502 will step up dividends, while 653 may snip it. As many as 158 companies are likely to skip payouts as they showed a net loss in the nine months ended December 2008.
