TCS declares its second-highest divided ever in FY25

Tata Consultancy Services (TCS), the country’s largest IT company has announced its second-highest dividend for FY25. With one more quarter to go, the total dividend declared for the current financial year has totalled at ₹96. This is the highest-ever dividend distributed by the company in a given financial year, except for FY23. The dividend for the current year has already outpaced the FY24 dividend per share (DPS), which stood at ₹73.

In contrast, the company distributed a total dividend of ₹115 per equity share in FY23, including a special dividend of ₹67 per equity share. The increased dividend payout has resulted in an outflow of ₹42,079 crore for the company, which took its dividend payout to 107.6%. In fact, the company enjoys an average payout ratio of over 100% for the five years through FY24.

According to the company’s management, TCS witnessed negative constant currency growth across major geographies. However, it managed to report a total contract value (TCV) of $10.2 billion in the December quarter. “TCV going up after two quarters gives us confidence over the medium term,” said K Krithivasan, CEO of TCS post Q3 results. He further added that we are seeing some improvement in sentiment with respect to discretionary spending across verticals and is comfortable to say the calendar year 2025 should be better than the previous year.

Also Read: TCS hiring 2025: Total headcount sees net decline of 5370 employees, attrition rises to 13%

During the December quarter, the net profit of TCS increased 4% quarter-on-quarter to ₹12,380 crore. That compares with a CNBC-TV18 Poll of ₹12,362 crore estimated for the quarter. At ₹15,477 crore, the operating profit of the company also fell short of estimates. A CNBC-TV18 Poll had pegged an EBIT (earnings before interest and taxes) of ₹15,759 crore for the quarter. Even the dollar revenue for the quarter came in at $7.5 billion, registering a sequential drop of 1.7%.

“In a quarter that saw significant cross-currency volatility, TCS’s strong execution, cost management and deft currency risk management helped deliver healthy margin improvement and free cash flows. Disciplined investments in talent and infrastructure should lend good support to long-term business growth,” said Samir Seksaria, Chief Financial Officer of TCS.

The equity shareholders of the company will receive its third interim dividend and the special dividend on February 3, 2025. The company has fixed January 17 as the record date for the payout. Ahead of the earnings, shares of the company closed at ₹4038.85 on the NSE, down 1.7%. The stock gained 8% last year and is down 1.4% so far in 2025.

Also Read: TCS Q3 Results: US Dollar revenue declines more than estimates; deal wins back above $10 billion