TCS Or Infosys: Who Will Reward Shareholders With Huge Dividends After Q3 Results?

Both tech giants, Tata Consultancy Services (TCS) and Infosys announced their December 2023 quarterly earnings report on January 11. However, only one of them has declared a hefty reward for their shareholders. To be precise, up to Rs 27 per share dividends are stored in line!

It will be TCS that is going to pay a massive Rs 27 per share dividend for FY24. The total includes a third interim dividend of Rs 9 per share and a special dividend of Rs 18 per share.

TCS is the largest dividend-paying stock in the IT sector. In 2023 alone, the company paid up to 11,700% valuing to Rs 117 per share. The 2023 dividend payout included the first and second interim dividends for FY24 and a few dividend rewards for FY23. Last year, there was one specific dividend which was special to the tune of a whopping Rs 67 per share, which was also paid along with a third interim dividend of Rs 8 per share for FY23.

So far in FY24, TCS has already paid first and second interim dividend of Rs 9 per share each. Together, TCS has paid up to 1800% dividend amounting to Rs 18 per share in the current fiscal.

It paid up to 11,500% dividend aggregating to Rs 115 per share in the financial year 2022-23.

As per Trendlyne data, TCS has delivered up to 82 dividends since October 2004. TCS was listed on BSE and NSE on August 25, 2004.

Currently, TCS's share price has a dividend yield of 3.13%. On BSE, TCS shares ended at Rs 3,736.20 apiece, up by 0.61% with a market cap of Rs 13,67,094.77 crore after market hours of January 11.

For the 3rd interim dividend of FY24, TCS will turn ex-dividend on January 19, which is also the record date to determine the names of eligible shareholders for Rs 27 per share dividends. As per the regulatory filing, TCS said that the third interim and special dividend will be paid on Monday, February 5, 2024, to eligible equity shareholders of the company.

Compared to Infosys, TCS is the largest IT company in terms of market share. Although Infosys did not declare any dividends in Q3FY24, it still holds a consistent track record of paying dividends.

In the last 12 months, Infosys has paid up to Rs 35.50 per share of dividends. The data showed that the company has declared about 49 dividends since October 2000. Currently, Infosys has a dividend yield of 2.38%.

On Thursday, Infosys' share price ended at Rs 1,495 apiece, down by 1.62% with a market cap of Rs 6,20,491.91 crore on BSE. Infosys is the second-largest IT company in India.

Generally, dividends reflect a company's potential and ability to share a portion of its net profits from the respective financial year with its shareholders. They are paid to those eligible shareholders who hold the dividend-paying stock at the specified date. But notably, dividends vary into three categories, interim, special and final.

In Q3FY24, TCS recorded a net profit of RsRs 11,058 crore, registering a growth of 1.95% year-on-year but a decline of 2.5% quarter-on-quarter. While Infosys posted a net profit of Rs Rs 6,106 crore, down by 7.3 % year-on-year and 1.7% quarter-on-quarter.

As per BSE FAQs, to be eligible to receive dividends, investors have to have shares in the Demat account by record date. Meanwhile, the ex-dividend date is the day when the price of the equity share of the listed company gets adjusted for the dividend payout.